SCDL-Project Finance

PROJECT FINANCE
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The Blank
Question
The basic difference between the feasibility study report and ________ is the le
vel of accuracy and degree of detail.
Correct Answer
Detailed Project report
Your Answer
Multiple Choice Single Answer
Question
End use method of Commercial appraisal technique is :-
Correct Answer
A list of industries wherein the product is used is made and quantity and volume
is arrived at
Your Answer
is arrived at
True/False
Question
The advantage of secondary sources of data is that it is readily and economicall
y available.
Correct Answer
True
Your Answer
True
Select The Blank
Question
Depreciation is sometimes treated as ________ funds.
Correct Answer
Source
Your Answer
Source
Multiple Choice Multiple Answer
Question
Casual methods of Demand forecasting consists of :-
Correct Answer
Consumption-level method , Econometric method
Your Answer
Question
Financial and economic aspect of the Visit report consists of :-
Correct Answer
Company’s financial year , Impact of Government policies on company operations , C
omments on the last published accounts
Your Answer
Question
The statement which shows the movement of cash into and out of firm’s kittie is kn
own as :-
Correct Answer
Cash flow statement
Your Answer
Cash flow statement
True/False
Question
Name of the finance manager comes under the Project organisation category of the
Project report.
Correct Answer
True
Your Answer
True
Question
Cost of laying roads comes under :-
Correct Answer
Land and site cost
Your Answer
Land and site cost
True/False
Question
Debt Service means payment of installments and interest against an amount borrow
ed as per terms of loan.
Correct Answer
True
Your Answer
True
Question
Infrastructural projects include :-
Correct Answer
Power Generation and Distribution
Your Answer
True/False
Question
The ‘BCG Matrix ‘analysis various products of the organisation in the terms of Busin
ess strength and Industry Attractiveness.
Correct Answer
False
Your Answer
False
Select The Blank
Question
A Project has a ________ represented by growth, maturity and decay.
Correct Answer
Life cycle
Your Answer
Life cycle
Select The Blank
Question
Position regarding requirement and training of operational staff comes under the
________ category of Project report.
Correct Answer
Project organisation
Your Answer
Question
Receivables is categorised under :-
Correct Answer
Current assets and liabilities
Your Answer
True/False
Question
Managerial problems in a project are the most pervasive.
Correct Answer
True
Your Answer
True
Question
Disposition of funds includes :-
Correct Answer
Increase in working capital , Preliminary expenses , Dividend
Your Answer
True/False
Question
A project is unique and no two projects are similar.
Correct Answer
True
Your Answer
True
True/False
Question
The cost factors of the product mixed is also taken into account to arrive at co
st at various levels of production and its cost impact of the manufacturing.
Correct Answer
True
Your Answer
True
Question
The objectives of the funds flow statement is as follows :-
Correct Answer
To indicate the financial strength and weakness of the business , To help to und
erstand the changes in assets as well as asset sources which are not revealed by
the income statement , To find out the uses of loans raised by the business
Your Answer
To help to understand the changes in assets as well as asset sources which are n
ot revealed by the income statement , To find out the uses of loans raised by th
e business , To indicate the financial strength and weakness of the business
Select The Blank
Question
Under the SPACE Model, Customer loyalty is determined under the ________ dimensi
on.
Correct Answer
Company’s competitive advantage
Your Answer
Company’s competitive advantage
True/False
Question
Cost and time overrun of the project may lead to loss on account of lost market
opportunities.
Correct Answer
True
Your Answer
True
Question
The ratio which indicates the ability of the company to meet current obligations
is termed as :-
Correct Answer
Current ratio
Your Answer
Current ratio
Question
While choosing the location for a project, the following factors should be consi
dered :-
Correct Answer
Proximity to raw materials and markets , Availability of infrastructure , Govern
ment policies and other factors
Your Answer
Question
The sources of long term and medium term finance are :-
Correct Answer
Equity shares , Public deposit
Your Answer
Select The Blank
Question
More accurate the estimation of the level of current assets and current liabilit
ies, more accurate will be estimation of the requirement of ________.
Correct Answer
Working capital
Your Answer
Working capital
True/False
Question
Debt Equity ratio is a ‘Solvency ratio’.
Correct Answer
True
Your Answer
True
Match The Following
Question
Correct Answer
Your Answer
Organisation and Management
Strikes/lay-offs/lockouts etc.
Material inputs and utilities
Stock of raw material
Working capital
Sanctioned bank limit
Marketing
Pricing policy
Pricing policy
Question
Management qualities includes :-
Correct Answer
Honesty , Financial resources , Initiative
Your Answer
Select The Blank
Question
________ in liabilities involves inflow of funds.
Correct Answer
Increase
Your Answer
Increase
Select The Blank
Question
The ________ market is longer the order of the day since this is an era of profe
ssionalization and specialised services are available at cost.
Correct Answer
Monopolistic
Your Answer
Monopolistic
Question
Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer
Moving Averages method , Trend Projection method
Your Answer
Trend Projection method , Moving Averages method
Question
Borrower’s contribution towards Working capital is known as :-
Correct Answer
Margin money
Your Answer
Margin money
Question
A project objective which states “What’ is to be viewed” is termed as :-
Correct Answer
Strategic perspective
Your Answer
Question
The basic characteristic of a project is :-
Correct Answer
That it involves current outlay of funds in expectation of future benefits
Your Answer
Select The Blank
Question
Name and designation of the chief executive comes under the ________ category.
Correct Answer
General
Your Answer
General
Select The Blank
Question
Under ________ method, the forecasts are modified in the light of observed error
s.
Correct Answer
Exponential smoothing
Your Answer
Question
The rate of discount which would equate the present value of investments to the
present value of benefits over the life of the project is known as :-
Correct Answer
Internal rate of return
Your Answer
Question
In the Detailed Project Report, Technical aspects includes :-
Correct Answer
Plant capacity , Quality standards , Raw material requirement
Your Answer
True/False
Question
Delay in recruitment of staff may lead to cost and time overrun
Correct Answer
True
Your Answer
True
Question
The basic document for facilitating Project financing is the :-
Correct Answer
Your Answer
Question
External sources of cash are as follows :-
Correct Answer
Issue of new shares , Long term loans , Short term borrowings
Your Answer
Question
The following are the sources of funds :-
Correct Answer
Operating Profit , Non operating Income
Your Answer
Select The Blank
Question
Retained earnings indicates that whatever profits are earned by the company are
not distributed by it by way of ________ but are kept aside for use in future fo
r expansion or other purpose.
Correct Answer
Dividend
Your Answer
Dividend
Question
Limitations of fund flow statement are :-
Correct Answer
It does not provide any new information but only rearranges the various facts ,
It does not consider non-fund transactions
Your Answer
Match The Following
Question
Correct Answer
Your Answer
Project appraisal
It is the evaluation of project from technical, market, financial, economic and
social perspective before committing funds for investment
Program
It is large in scope, is activity oriented and is not necessarily time bound
Project
It is one-shot, time-limited, goal oriented, major undertaking requiring the com
mitment of varied skills and resources
Pre-feasibility study
It is a preliminary assessment of the project idea to determine whether or not t
he investment opportunity is promising
Question
Psychographic market appraisal answers to :-
Correct Answer
Why they buy?
Your Answer
Why they buy?
Question
Financing plans consists of :-
Correct Answer
Internal accruals , Share capital , Term loans
Your Answer
Question
Ratios relating to working capital are :-
Correct Answer
Current ratio , Internal measure , Quick ratio
Your Answer
True/False
Question
Export Market is a technique used for forecasting under Commercial appraisal tec
hnique.
Correct Answer
True
Your Answer
True
Question
The sources of cash are :-
Correct Answer
Cash from operations , Sale of machinery , Issue of new shares
Your Answer
Question
Past trend method of Commercial appraisal technique is :-
Correct Answer
Adopted as a guide depending on the consumption pattern of the society as a whol
e
Your Answer
e
Select The Blank
Question
________ is a current asset
Correct Answer
Book debts
Your Answer
Book debts
Select The Blank
Question
In the GE’s Stop Light Matrix, when ________ situation prevails , Products call fo
r divestment.
Correct Answer
Average Business Strength and Low Industry attractiveness
Your Answer
Select The Blank
Question
Detailed Project Report is generally prepared from a ________ report with additi
onal information.
Correct Answer
Feasibility
Your Answer
Feasibility
Question
The third phase of the technical appraisal which focuses upon appraising the lik
ely technical gaps consists of :-
Correct Answer
Problems pertaining to the period when the project is in operation
Your Answer
Question
The acronym for ‘LPG’ is :-
Correct Answer
Liberalisation, Privatisation and Globalisation
Your Answer
True/False
Question
Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer
True
Your Answer
True
Question
Defaults category of the Project report may be in respect of :-
Correct Answer
Term loans , Principal , Interest
Your Answer
Question
The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer
Stars , Question marks
Your Answer
Select The Blank
Question
________ tries to have what the customer will want- where, when, in what form an
d at what price.
Correct Answer
Marketing
Your Answer
Marketing
Question
Cost of the Project encompasses :-
Correct Answer
The total of all items of outlay associated with a project
Your Answer
Select The Blank
Question
Cost of fencing comes under the ________ category of the Project report.
Correct Answer
Land and site development
Your Answer
Question
Trend Projection method of demand forecasting consists of :-
Correct Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship
Your Answer
Select The Blank
Question
Inflow of funds may not necessarily result in ________.
Correct Answer
Inflow of cash
Your Answer
Inflow of cash
True/False
Question
A high debt equity ratio may indicate that the financial stake of the creditors
is more than that of the owners.
Correct Answer
True
Your Answer
True
Question
Sources of funds include :-
Correct Answer
Increase in secured borrowing
Your Answer
Select The Blank
Question
In the GE’s Stop Light Matrix, when ________ situation prevails, Products call for
Hold.
Correct Answer
Average Business Strength and Medium Industry Attractiveness
Your Answer
Question
As per the GE’s Stop Light Matrix, Products may justify substantial commitment of
funds where there is :-
Correct Answer
Strong Business Strength and high Industry attractiveness , Average Business str
ength and high Industry attractiveness
Your Answer
True/False
Question
Ratios are based only on the information which has been recorded in the financia
l statements.
Correct Answer
True
Your Answer
True
True/False
Question
Trend projection method is the important technique for forecasting demand.
Correct Answer
True
Your Answer
True
Question
“Fly by night” operator mentality is a :-
Correct Answer
Management quality
Your Answer
Management quality
Question
The applications of cash are :-
Correct Answer
Purchase of fixed assets , Payment of long term loans
Your Answer
Question
A Project is a temporary endeavor to achieve some specific objectives within a :
-
Correct Answer
Predefined time
Your Answer
Predefined time
Question
Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer
Cost and time overrun
Your Answer
True/False
Question
Ratio analysis is a technique of planning and control.
Correct Answer
False
Your Answer
False
Question
General category of the Project report consists of :-
Correct Answer
Name of the Industrial concern , Proposed product , Location of the factory
Your Answer
Question
After the SPACE chart is constructed, we would normally get any one of the follo
wing basic strategic postures :-
Correct Answer
Aggressive Posture , Competitive Posture , Defensive Posture
Your Answer
True/False
Question
The emphasis of a finance manager should be on taking a synergistic view of the
project rather than looking at it only from the financial aspects.
Correct Answer
True
Your Answer
True
Question
BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer
Relative Market share and Industry Growth rate
Your Answer
True/False
Question
Change in the project concept itself may lead to cost and time overrun.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The company having ________, is appropriate for the strategic posture of Conserv
ative under the SPACE approach.
Correct Answer
Limited competitive advantage, belonging to a not so attractive industry but enj
oying financial strength and operating in a relatively stable environment
Your Answer
Lacks both competitive advantage as well as financial strength and belongs to a
not so attractive industry, operating in an unstable environment
Select The Blank
Question
Details regarding Internal accruals comes under the ________ category of Project
report.
Correct Answer
Financing plan
Your Answer
Financing plan
Match The Following
Question
Correct Answer
Your Answer
Increase in current liabilities
Decreases working capital
Increase in liabilities
Inflow of funds
Inflow of funds
Decrease in liabilities
Outflow of funds
Outflow of funds
Increase in current assets
Increases working capital
Question
Provision for tax can be treated as :-
Correct Answer
Item of current liabilities , Added back to the profit as per profit and loss ac
count to arrive at operating profits
Your Answer
Question
The data for ratio analysis is obtained from :-
Correct Answer
Profit and Loss Account , Balance Sheet
Your Answer
Question
The industrial concern earned profits by increasing the sales volume under the :
-
Correct Answer
Sales concept
Your Answer
Sales concept
Question
The entire life of the project is taken into account under :-
Correct Answer
Average rate of return method
Your Answer
Match The Following
Question
Correct Answer
Your Answer
General functional layout
Present the general relationship between equipment buildings and civil works
Location
Broad area such as city, industrial belt etc.
Site
Specific piece of land where the project would be set up
Plant layout
Physical layout of the factory
Question
Geographic market appraisal answers to :-
Correct Answer
Where do the customers live?
Your Answer
True/False
Question
In the BCG Matrix, the key term of Cash Cows require further commitment of funds
.
Correct Answer
False
Your Answer
False
True/False
Question
For computing Interest coverage ratio, Profit after Interest and taxes are taken
into account.
Correct Answer
False
Your Answer
False
Select The Blank
Question
A smaller unit into which the overall requirement of capital of a company is sub
-divided is termed as ________.
Correct Answer
Share
Your Answer
Share
Select The Blank
Question
Commission outstanding is ________ of funds.
Correct Answer
Application
Your Answer
Application
Select The Blank
Question
Correct Answer
Your Answer
Audit report
True/False
Question
Correct Answer
True
Your Answer
True
Select The Blank
Question
Correct Answer
Book debts
Your Answer
Trade credit
Question
The formula for Break Even Point is :-
Correct Answer
Fixed cost / ( Sales Price – Variables)
Your Answer
Fixed cost / ( Sales Price – Variables)
True/False
Question
Banks and Financial Institutions, world-wide, are now financing projects with st
rategies and terms that would have been hard to believe/imagine just a few years
back.
Correct Answer
True
Your Answer
True
Question
Liabilities side of Balance sheet includes :-
Correct Answer
Unsecured loans
Your Answer
Unsecured loans
Question
Net Working Capital means :-
Correct Answer
Current assets less Current liabilities
Your Answer
Question
Correct Answer
Your Answer
True/False
Question
It is mandatory for each unit to obtain necessary clearance from Pollution Contr
ol Authorities before setting up any project.
Correct Answer
True
Your Answer
True
True/False
Question
Debt Service Coverage Ratio is one of the most important ratios calculated by th
e bankers or financial institutions giving long term finance to the organisation
.
Correct Answer
True
Your Answer
True
Select The Blank
Question
Sometimes the term ________ is interpreted as cash equivalent i.e. cash and mark
etable securities.
Correct Answer
Fund
Your Answer
Investment
Question
Correct Answer
Your Answer
Purchase of fixed assets , Payment of long term loans , Issue of new machinery
Select The Blank
Question
d at what price.
Correct Answer
Marketing
Your Answer
Marketing
Question
Correct Answer
Your Answer
Trend Projection method , Consumption-level method , Moving Averages method
Question
Disposal of fixed assets is categorised under :-
Correct Answer
Miscellaneous
Your Answer
Land and site cost
Question
Correct Answer
Your Answer
Match The Following
Question
Correct Answer
Your Answer
Finance manager
Finance manager
General category of Project report
Location of factory
Consultancy fees
Cost aspect of the project report
Consultancy fees
Location of factory
Financing plan
Unsecured loans
Unsecured loans
Question
In the Detailed Project Report, Marketing aspects includes :-
Correct Answer
Demand forecasting , Promotion , Distribution
Your Answer
Question
Marketing category of the Project report consists of :-
Correct Answer
Pricing policy , Target market , Market potential
Your Answer
Target market , Market potential , Pricing policy
Question
Sources of funds includes :-
Correct Answer
Depreciation , Preliminary expenses written off , Increase in secured borrowing
Your Answer
Match The Following
Question
Correct Answer
Your Answer
Moving into new areas/product lines
Diversification Projects
Modernisation Projects
Suppliers’ credit
Short term finance
Short term finance
Deferred credit
Long term finance
Long term finance
Setting up new units
New Projects
New Projects
Question
Correct Answer
Your Answer
Question
Sewerage and drainage cost of the project is categorised under :-
Correct Answer
Building cost
Your Answer
Building cost
Question
Correct Answer
Your Answer
Proposed product , Location of the factory , Land cost
True/False
Question
The ratios of one organisation compared with the ratios of the same organisation
is termed as inter-firm comparison.
Correct Answer
False
Your Answer
False
Select The Blank
Question
In the GE’s Stop Light Matrix, when ________ situation prevails , Products call fo
r divestment.
Correct Answer
Your Answer
Weak Business strength and high Industry attractiveness
Question
Correct Answer
Your Answer
Added back to the profit as per profit and loss account to arrive at operating p
rofits , Item of current assets , Item of working capital
Question
The cost of Plant and Machinery may be adjusted for a possible increase known as
:-
Correct Answer
Escalation
Your Answer
Escalation
Question
Ratio analysis is a widely used tool of :-
Correct Answer
Financial analysis
Your Answer
Financial analysis
True/False
Question
y available.
Correct Answer
True
Your Answer
True
True/False
Question
Debt Equity ratio is a ‘Solvency ratio’.
Correct Answer
True
Your Answer
True
Select The Blank
Question
Excessive expenditures on foreign technicians leads to ________.
Correct Answer
Your Answer
Question
Correct Answer
Share capital , Term loans , Internal accruals
Your Answer
Share capital , Term loans , Salaries
Select The Blank
Question
Retained earnings is a source of ________ finance.
Correct Answer
Internal
Your Answer
Internal
Select The Blank
Question
In order to meet the cost of large project, the technique of ________ has been d
eveloped so that the financial commitment and risks associated with a project ar
e shared between the project sponsor and the lending institutions.
Correct Answer
Limited recourse financing
Your Answer
Unlimited recourse financing
True/False
Question
Correct Answer
True
Your Answer
True
Question
Correct Answer
Your Answer
Select The Blank
Question
Correct Answer
Working capital
Your Answer
Working capital
True/False
Question
Correct Answer
False
Your Answer
True
True/False
Question
opportunities.
Correct Answer
True
Your Answer
True
Question
dered :-
Correct Answer
Your Answer
Question
In the Cash flow statement, the sources of funds include :-
Correct Answer
Development rebate reserve
Your Answer
Select The Blank
Question
Correct Answer
General
Your Answer
Question
As per the GE’s Stop Light Matrix, Products may justify substantial commitment of
funds where there is :-
Correct Answer
Your Answer
Question
The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strateg
ic Position and Action Evaluation Model are considered to be highly relevant as
:-
Correct Answer
Portfolio Planning Tools
Your Answer
Select The Blank
Question
Correct Answer
Your Answer
General category
Question
The emphasis of the Banks and Financial institutions particularly in India has s
hifted from ‘Sanctions’, ‘Disbursements’ and ‘Security-orientation’ to ‘Recovery/Recycling’
:-
Correct Answer
Activity orientation
Your Answer
Select The Blank
Question ________ is a current liability.
Correct Answer Trade credit
Your Answer Trade credit
Question Marketing category of the Project report consists of :-
Correct Answer Target market , Market potential , Pricing policy
Your Answer Target market , Market potential , Pricing policy
Select The Blank
Question Under the SPACE Model, Customer loyalty is determined under the _______
_ dimension.
Correct Answer Company’s competitive advantage
Your Answer Company’s competitive advantage
Question Sources of funds include :-
Correct Answer Increase in secured borrowing
Your Answer Increase in secured borrowing
True/False
Question It is mandatory for each unit to obtain necessary clearance from Pollut
ion Control Authorities before setting up any project.
Correct Answer True
Your Answer False
Question A project objective which states “What’ is to be viewed” is termed as :-
Correct Answer Strategic perspective
Your Answer Strategic perspective
Select The Blank
Question ________ tries to have what the customer will want- where, when, in wha
t form and at what price.
Correct Answer Marketing
Your Answer Marketing
True/False
Question Debt Service Coverage Ratio is one of the most important ratios calcula
ted by the bankers or financial institutions giving long term finance to the org
anisation.
Correct Answer True
Your Answer True
Question Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Question The second phase of the technical appraisal which focuses upon appraisi
ng the likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Project implementation
Your Answer Problems faced during the Construction and Project implementation
True/False
Question A project is unique and no two projects are similar.
Correct Answer True
Your Answer True
Question Land and site development cost includes cost of :-
Correct Answer Gates
Your Answer Gates
Question A project objective which states What “achieving it ” would cost is known a
s :-
Correct Answer Finance cost aspect
Your Answer Finance cost aspect
Select The Blank
Question ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Match The Following
Question Correct Answer Your Answer
Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative
Management Perception Aspiration level/ conservative Aspiration level/ conservat
ive
Organisational Climate Person oriented Person oriented
Match The Following
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Question Disposal of fixed assets is categorised under :-
Correct Answer Miscellaneous
Your Answer Miscellaneous
True/False
Question The emphasis of a finance manager should be on taking a synergistic vie
w of the project rather than looking at it only from the financial aspects.
Correct Answer True
Your Answer True
Question Geographic market appraisal answers to :-
Correct Answer Where do the customers live?
Your Answer Where do the customers live?
Question Every project involves financial outlay which can be referred to as :-
Correct Answer Project finance
Your Answer Project finance
Select The Blank
Question ________ occupies a unique position in the macro economic development w
hich helps in induction of new technology and facilitates, greater efficiency as
well as higher productivity.
Correct Answer Investment
Your Answer Production
Question The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of future
benefits
Your Answer That it involves current outlay of funds in expectation of future be
nefits
Question Pre-operative expenses include :-
Correct Answer Interest on deferred payments
Your Answer Interest on deferred payments
Question Advantages of fund flow statement are :-
Correct Answer It determines financial consequences of the business operations ,
It enables the firm to plan its financial resources properly , It helps as a re
liable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations , It
considers non-fund transactions , It enables the firm to plan its financial res
ources properly
True/False
Question Managerial problems in a project are the most pervasive.
Correct Answer True
Your Answer True
True/False
Question In the BCG Matrix “DOGS” indicate products which are generally during the s
tage of Decline of a Product Life Cycle.
Correct Answer True
Your Answer True
Question The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loans
Your Answer Purchase of fixed assets , Payment of long term loans , Issue of new
machinery
True/False
Question Debt Equity ratio is a ‘Solvency ratio’.
Correct Answer True
Your Answer True
True/False
Question Current assets includes stock-in-process.
Correct Answer True
Your Answer True
Question A project objective can be said to have the following dimensions viz.:
Correct Answer Strategic perspective , Time span , Finance cost aspect
Your Answer Strategic perspective , Time span , Finance cost aspect
Question Liabilities side of Balance sheet includes :-
Correct Answer Unsecured loans
Your Answer Unsecured loans
Question The rate of discount which would equate the present value of investment
s to the present value of benefits over the life of the project is known as :-
Correct Answer Internal rate of return
Your Answer Internal rate of return
Select The Blank
Question A Project has a ________ represented by growth, maturity and decay.
Correct Answer Life cycle
Your Answer Life cycle
Question After the SPACE chart is constructed, we would normally get any one of
the following basic strategic postures :-
Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture
Your Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The Blank
Question ________ is the summary of cash book or Receipts and Payments statement
.
Correct Answer Cash flow statement
Your Answer Cash flow statement
Question The point at which the unit neither earns profit nor incurs loss is kno
wn as :-
Correct Answer Break Even Point
Your Answer Break Even Point
Question In the Detailed Project Report, Marketing aspects includes :-
Correct Answer Demand forecasting , Promotion , Distribution
Your Answer Demand forecasting , Promotion , Distribution
Question The various aspects which need to be considered while assessing Project
finance financing are :-
Correct Answer Environmental factors , Risk involved , Managerial compensation
Your Answer Environmental factors , Risk involved , Managerial compensation
Question Casual methods of Demand forecasting consists of :-
Correct Answer Consumption-level method , Econometric method
Your Answer Consumption-level method , Econometric method
Select The Blank
Question Under ________ method, the forecasts are modified in the light of obser
ved errors.
Correct Answer Exponential smoothing
Your Answer Exponential smoothing
Question Provision for tax can be treated as :-
Correct Answer Item of current liabilities , Added back to the profit as per pro
fit and loss account to arrive at operating profits
Your Answer Added back to the profit as per profit and loss account to arrive at
operating profits , Item of current assets , Item of working capital
Select The Blank
Question Retained earnings indicates that whatever profits are earned by the com
pany are not distributed by it by way of ________ but are kept aside for use in
future for expansion or other purpose.
Correct Answer Dividend
Your Answer Dividend
Question Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
Question The ratio that roughly measures the company’s potential reserve of cash i
s termed as :-
Correct Answer Net Working capital to total assets
Your Answer Net Working capital to total assets
Select The Blank
Question Name and designation of the chief executive comes under the ________ ca
tegory.
Correct Answer General
Your Answer General
Question Miscellaneous fixed assets includes :-
Correct Answer Cables
Your Answer Cables
Question In the Cash flow statement, the sources of funds include
Correct Answer Share Issue
Your Answer Share Issue
Select The Blank

Question
Correct Answer
Your Answer
Question
End use method of Commercial appraisal technique is :-
Correct Answer
is arrived at
Your Answer
is arrived at
True/False
Question
y available.
Correct Answer
True
Your Answer
True
Select The Blank
Question
Depreciation is sometimes treated as ________ funds.
Correct Answer
Source
Your Answer
Source
Question
Casual methods of Demand forecasting consists of :-
Correct Answer
Your Answer
Question
Correct Answer
Company s financial year , Impact of Government policies on company operations ,
Comments on the last published accounts
Your Answer
Question
The statement which shows the movement of cash into and out of firm s kittie is
known as :-
Correct Answer
Cash flow statement
Your Answer
Cash flow statement
True/False
Question
Name of the finance manager comes under the Project organisation category of the
Project report.
Correct Answer
True
Your Answer
True
Question
Cost of laying roads comes under :-
Correct Answer
Land and site cost
Your Answer
Land and site cost
True/False
Question
Debt Service means payment of installments and interest against an amount borrow
ed as per terms of loan.
Correct Answer
True
Your Answer
True
Question
Infrastructural projects include :-
Correct Answer
Your Answer
True/False
Question
The BCG Matrix analysis various products of the organisation in the terms of B
usiness strength and Industry Attractiveness.
Correct Answer
False
Your Answer
False
Select The Blank
Question
A Project has a ________ represented by growth, maturity and decay.
Correct Answer
Life cycle
Your Answer
Life cycle
Select The Blank
Question
Correct Answer
Your Answer
Question
Receivables is categorised under :-
Correct Answer
Your Answer
True/False
Question
Managerial problems in a project are the most pervasive.
Correct Answer
True
Your Answer
True
Question
Disposition of funds includes :-
Correct Answer
Your Answer
True/False
Question
A project is unique and no two projects are similar.
Correct Answer
True
Your Answer
True
True/False
Question
Correct Answer
True
Your Answer
True
Question
The objectives of the funds flow statement is as follows :-
Correct Answer
To indicate the financial strength and weakness of the business , To help to und
erstand the changes in assets as well as asset sources which are not revealed by
the income statement , To find out the uses of loans raised by the business
Your Answer
To help to understand the changes in assets as well as asset sources which are n
ot revealed by the income statement , To find out the uses of loans raised by th
e business , To indicate the financial strength and weakness of the business
Select The Blank
Question
Under the SPACE Model, Customer loyalty is determined under the ________ dimensi
on.
Correct Answer
Company s competitive advantage
Your Answer
Company s competitive advantage
True/False
Question
opportunities.
Correct Answer
True
Your Answer
True
Question
The ratio which indicates the ability of the company to meet current obligations
is termed as :-
Correct Answer
Current ratio
Your Answer
Current ratio
Question
dered :-
Correct Answer
Your Answer
Question
The sources of long term and medium term finance are :-
Correct Answer
Your Answer
Select The Blank
Question
Correct Answer
Working capital
Your Answer
Working capital
True/False
Question
Debt Equity ratio is a Solvency ratio .
Correct Answer
True
Your Answer
True
Match The Following
Question
Correct Answer
Your Answer
Organisation and Management
Material inputs and utilities
Working capital
Marketing
Pricing policy
Pricing policy
Question
Management qualities includes :-
Correct Answer
Your Answer
Select The Blank
Question
________ in liabilities involves inflow of funds.
Correct Answer
Increase
Your Answer
Increase
Select The Blank
Question
The ________ market is longer the order of the day since this is an era of profe
ssionalization and specialised services are available at cost.
Correct Answer
Monopolistic
Your Answer
Monopolistic
Question
Correct Answer
Moving Averages method , Trend Projection method
Your Answer
Question
Borrower s contribution towards Working capital is known as :-
Correct Answer
Margin money
Your Answer
Margin money
Question
A project objective which states "What is to be viewed" is termed as :-
Correct Answer
Your Answer
Question
The basic characteristic of a project is :-
Correct Answer
Your Answer
Select The Blank
Question
Correct Answer
General
Your Answer
General
Select The Blank
Question
Under ________ method, the forecasts are modified in the light of observed error
s.
Correct Answer
Your Answer
Question
The rate of discount which would equate the present value of investments to the
present value of benefits over the life of the project is known as :-
Correct Answer
Your Answer
Question
In the Detailed Project Report, Technical aspects includes :-
Correct Answer
Your Answer
True/False
Question
Delay in recruitment of staff may lead to cost and time overrun
Correct Answer
True
Your Answer
True
Question
The basic document for facilitating Project financing is the :-
Correct Answer
Your Answer
Question
External sources of cash are as follows :-
Correct Answer
Your Answer
Question
The following are the sources of funds :-
Correct Answer
Your Answer
Select The Blank
Question
Retained earnings indicates that whatever profits are earned by the company are
not distributed by it by way of ________ but are kept aside for use in future fo
r expansion or other purpose.
Correct Answer
Dividend
Your Answer
Dividend
Question
Limitations of fund flow statement are :-
Correct Answer
Your Answer
Match The Following
Question
Correct Answer
Your Answer
Project appraisal
Program
Project
Pre-feasibility study
Question
Psychographic market appraisal answers to :-
Correct Answer
Why they buy?
Your Answer
Why they buy?
at 5:00 AM 0 comments Links to this post
Labels: Project Finance
Project Finance - 2

Question
Correct Answer
Your Answer
Question
Ratios relating to working capital are :-
Correct Answer
Your Answer
True/False
Question
Export Market is a technique used for forecasting under Commercial appraisal tec
hnique.
Correct Answer
True
Your Answer
True
Question
The sources of cash are :-
Correct Answer
Your Answer
Question
Past trend method of Commercial appraisal technique is :-
Correct Answer
e
Your Answer
e
Select The Blank
Question
Correct Answer
Book debts
Your Answer
Book debts
Select The Blank
Question
In the GE s Stop Light Matrix, when ________ situation prevails , Products call
for divestment.
Correct Answer
Your Answer
Select The Blank
Question
Detailed Project Report is generally prepared from a ________ report with additi
onal information.
Correct Answer
Feasibility
Your Answer
Feasibility
Question
Correct Answer
Your Answer
Question
The acronym for LPG is :-
Correct Answer
Your Answer
True/False
Question
Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer
True
Your Answer
True
Question
Defaults category of the Project report may be in respect of :-
Correct Answer
Your Answer
Question
The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer
Your Answer
Select The Blank
Question
d at what price.
Correct Answer
Marketing
Your Answer
Marketing
Question
Cost of the Project encompasses :-
Correct Answer
Your Answer
Select The Blank
Question
Cost of fencing comes under the ________ category of the Project report.
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
Select The Blank
Question
Inflow of funds may not necessarily result in ________.
Correct Answer
Inflow of cash
Your Answer
Inflow of cash
True/False
Question
Correct Answer
True
Your Answer
True
Question
Sources of funds include :-
Correct Answer
Your Answer
Select The Blank
Question
In the GE s Stop Light Matrix, when ________ situation prevails, Products call f
or Hold.
Correct Answer
Your Answer
Question
As per the GE s Stop Light Matrix, Products may justify substantial commitment o
f funds where there is :-
Correct Answer
Your Answer
True/False
Question
Ratios are based only on the information which has been recorded in the financia
l statements.
Correct Answer
True
Your Answer
True
True/False
Question
Trend projection method is the important technique for forecasting demand.
Correct Answer
True
Your Answer
True
Question
"Fly by night" operator mentality is a :-
Correct Answer
Management quality
Your Answer
Management quality
Question
Correct Answer
Your Answer
Question
A Project is a temporary endeavor to achieve some specific objectives within a :
-
Correct Answer
Predefined time
Your Answer
Predefined time
Question
Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer
Your Answer
True/False
Question
Correct Answer
False
Your Answer
False
Question
Correct Answer
Your Answer
Question
After the SPACE chart is constructed, we would normally get any one of the follo
wing basic strategic postures :-
Correct Answer
Your Answer
True/False
Question
The emphasis of a finance manager should be on taking a synergistic view of the
project rather than looking at it only from the financial aspects.
Correct Answer
True
Your Answer
True
Question
Correct Answer
Your Answer
True/False
Question
Change in the project concept itself may lead to cost and time overrun.
Correct Answer
True
Your Answer
True
Select The Blank
Question
The company having ________, is appropriate for the strategic posture of Conserv
ative under the SPACE approach.
Correct Answer
Limited competitive advantage, belonging to a not so attractive industry but enj
oying financial strength and operating in a relatively stable environment
Your Answer
Lacks both competitive advantage as well as financial strength and belongs to a
not so attractive industry, operating in an unstable environment
Select The Blank
Question
Details regarding Internal accruals comes under the ________ category of Project
report.
Correct Answer
Financing plan
Your Answer
Financing plan
Match The Following
Question
Correct Answer
Your Answer
Increase in current liabilities
Increase in liabilities
Inflow of funds
Inflow of funds
Decrease in liabilities
Outflow of funds
Outflow of funds
Increase in current assets
Question
Correct Answer
Your Answer
Question
The data for ratio analysis is obtained from :-
Correct Answer
Your Answer
Question
The industrial concern earned profits by increasing the sales volume under the :
-
Correct Answer
Sales concept
Your Answer
Sales concept
Question
The entire life of the project is taken into account under :-
Correct Answer
Your Answer
Match The Following
Question
Correct Answer
Your Answer
General functional layout
Location
Site
Plant layout
Question
Geographic market appraisal answers to :-
Correct Answer
Your Answer
True/False
Question
In the BCG Matrix, the key term of Cash Cows require further commitment of funds
.
Correct Answer
False
Your Answer
False
True/False
Question
For computing Interest coverage ratio, Profit after Interest and taxes are taken
into account.
Correct Answer
False
Your Answer
False
Select The Blank
Question
A smaller unit into which the overall requirement of capital of a company is sub
-divided is termed as ________.
Correct Answer
Share
Your Answer
Share
Select The Blank
Question
Commission outstanding is ________ of funds.
Correct Answer
Application
Your Answer
Application
at 4:59 AM 0 comments Links to this post
Labels: Project Finance
Project Finance - 1
Select The Blank

Question
Correct Answer
Your Answer
Audit report
True/False
Question
Correct Answer
True
Your Answer
True
Select The Blank
Question
Correct Answer
Book debts
Your Answer
Trade credit
Question
The formula for Break Even Point is :-
Correct Answer
Fixed cost / ( Sales Price - Variables)
Your Answer
Fixed cost / ( Sales Price - Variables)
True/False
Question
Banks and Financial Institutions, world-wide, are now financing projects with st
rategies and terms that would have been hard to believe/imagine just a few years
back.
Correct Answer
True
Your Answer
True
Question
Liabilities side of Balance sheet includes :-
Correct Answer
Unsecured loans
Your Answer
Unsecured loans
Question
Net Working Capital means :-
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
True/False
Question
It is mandatory for each unit to obtain necessary clearance from Pollution Contr
ol Authorities before setting up any project.
Correct Answer
True
Your Answer
True
True/False
Question
Debt Service Coverage Ratio is one of the most important ratios calculated by th
e bankers or financial institutions giving long term finance to the organisation
.
Correct Answer
True
Your Answer
True
Select The Blank
Question
Sometimes the term ________ is interpreted as cash equivalent i.e. cash and mark
etable securities.
Correct Answer
Fund
Your Answer
Investment
Question
Correct Answer
Your Answer
Purchase of fixed assets , Payment of long term loans , Issue of new machinery
Select The Blank
Question
d at what price.
Correct Answer
Marketing
Your Answer
Marketing
Question
Correct Answer
Your Answer
Trend Projection method , Consumption-level method , Moving Averages method
Question
Disposal of fixed assets is categorised under :-
Correct Answer
Miscellaneous
Your Answer
Land and site cost
Question
Correct Answer
Your Answer
Match The Following
Question
Correct Answer
Your Answer
Finance manager
Finance manager
General category of Project report
Location of factory
Consultancy fees
Cost aspect of the project report
Consultancy fees
Location of factory
Financing plan
Unsecured loans
Unsecured loans
Question
In the Detailed Project Report, Marketing aspects includes :-
Correct Answer
Your Answer
Question
Marketing category of the Project report consists of :-
Correct Answer
Pricing policy , Target market , Market potential
Your Answer
Target market , Market potential , Pricing policy
Question
Sources of funds includes :-
Correct Answer
Your Answer
Match The Following
Question
Correct Answer
Your Answer
Moving into new areas/product lines
Diversification Projects
Modernisation Projects
Suppliers credit
Short term finance
Short term finance
Deferred credit
Long term finance
Long term finance
Setting up new units
New Projects
New Projects
Question
Correct Answer
Your Answer
Question
Sewerage and drainage cost of the project is categorised under :-
Correct Answer
Building cost
Your Answer
Building cost
Question
Correct Answer
Your Answer
Proposed product , Location of the factory , Land cost
True/False
Question
The ratios of one organisation compared with the ratios of the same organisation
is termed as inter-firm comparison.
Correct Answer
False
Your Answer
False
Select The Blank
Question
In the GE s Stop Light Matrix, when ________ situation prevails , Products call
for divestment.
Correct Answer
Your Answer
Weak Business strength and high Industry attractiveness
Question
Correct Answer
Your Answer
Added back to the profit as per profit and loss account to arrive at operating p
rofits , Item of current assets , Item of working capital
Question
The cost of Plant and Machinery may be adjusted for a possible increase known as
:-
Correct Answer
Escalation
Your Answer
Escalation
Question
Ratio analysis is a widely used tool of :-
Correct Answer
Financial analysis
Your Answer
Financial analysis
True/False
Question
y available.
Correct Answer
True
Your Answer
True
True/False
Question
Debt Equity ratio is a Solvency ratio .
Correct Answer
True
Your Answer
True
Select The Blank
Question
Excessive expenditures on foreign technicians leads to ________.
Correct Answer
Your Answer
Question
Correct Answer
Share capital , Term loans , Internal accruals
Your Answer
Share capital , Term loans , Salaries
Select The Blank
Question
Retained earnings is a source of ________ finance.
Correct Answer
Internal
Your Answer
Internal
Select The Blank
Question
In order to meet the cost of large project, the technique of ________ has been d
eveloped so that the financial commitment and risks associated with a project ar
e shared between the project sponsor and the lending institutions.
Correct Answer
Limited recourse financing
Your Answer
Unlimited recourse financing
True/False
Question
Correct Answer
True
Your Answer
True
Question
Correct Answer
Your Answer
Select The Blank
Question
Correct Answer
Working capital
Your Answer
Working capital
True/False
Question
Correct Answer
False
Your Answer
True
True/False
Question
opportunities.
Correct Answer
True
Your Answer
True
Question
dered :-
Correct Answer
Your Answer
Question
In the Cash flow statement, the sources of funds include :-
Correct Answer
Your Answer
Select The Blank
Question
Correct Answer
General
Your Answer
Question
As per the GE s Stop Light Matrix, Products may justify substantial commitment o
f funds where there is :-
Correct Answer
Your Answer
Question
The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strateg
ic Position and Action Evaluation Model are considered to be highly relevant as
:-
Correct Answer
Your Answer
Select The Blank
Question
Correct Answer
Your Answer
General category
Question
The emphasis of the Banks and Financial institutions particularly in India has s
hifted from Sanctions , Disbursements and Security-orientation to Recovery
/Recycling and :-
Correct Answer
Your Answer
Question The data for ratio analysis is obtained from :-
Correct Answer Profit and Loss Account , Balance Sheet
Your Answer Profit and Loss Account , Auditors report , Balance Sheet
Question Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer Cost and time overrun
Your Answer Management problems
Select The Blank
Question The Project Cycle should be in the ________ order
Correct Answer Identification of Project - Project Appraisal - Negotiations for
loans
Your Answer Identification of Project - Project Appraisal - Negotiations for loa
ns
True/False
Question Change in the project concept itself may lead to cost and time overrun.
Correct Answer True
Your Answer True
Question The industrial concern earned profits by increasing the sales volume un
der
the :-
Correct Answer Sales concept
Your Answer Marketing concept
Total SET 16
MATCH
1
Project organization Finance manager
General category of Project report Location of factory
Cost aspect of the project report Consultancy fees
Financing plan Unsecured loans
2
Private investment Power generation
Project Time -bound
Programme Not necessarily time bound
Foreign direct investment Machine tools
3
Management problems lack of exposure
Management Quality Initiative
Management Perception Aspiration level/ conservative
Organisational Climate Person oriented
4
Source of funds Depreciation
Fixed assets Building
Current assets Debtors
Current liability Trade credit
5
Project appraisal It is the evaluation of project from technical, market,
financial, economic and social perspective before committing funds for investmen
t
Program It is large in scope, is activity oriented and is not necessarily time
bound
Project It is one-shot, time-limited, goal oriented, major undertaking r
equiring the commitment of varied skills and resources
Pre-feasibility study It is a preliminary assessment of the project idea to de
termine whether or not the investment opportunity is promising
6
Increase in current liabilities Decreases working capital
Increase in liabilities Inflow of funds
Decrease in liabilities Outflow of funds
Increase in current assets Increases working capital
7
Permanent Working Capital finance Shares
Capital budgeting Acquire fixed
Working capital Invest in current asset
Inflationary conditions Working capital requirement high
8
Export market technique of Commercial appraisal Government provides ampl
e encouragement
Demand Technique forecasting of Commercial appraisal Future demand of the pro
duct
Past trend method of Commercial appraisal Adopted as a guide depending on
the consumption pattern of the society as a whole
End use method of Commercial appraisal A list of industries wherein the product
is used is made and quantity and volume is arrived at
9
Organisation and Management Strikes/lay-offs/lockouts etc.
Material inputs and utilities Stock of raw material
Working capital Sanctioned bank limit
Marketing Pricing policy
10
Technical aspect of detailed project report Detailed
Project EngineeringFinancial aspect of Detailed Project report
Profitability
Marketing aspect of Detailed Project report Distribution
Management aspect of detailed project report ;Conservativeness
11
Econometric method Mathematical representation of economic relation
ship
Primary source of data Market survey
Secondary source of data Collected in some other context
Leading indicators Variables that change faster than others
12
General functional layout Present the general relationship between equipm
ent buildings and civil works
Location Broad area such as city, industrial belt etc.
Site Specific piece of land where the project would be set up
Plant layout Physical layout of the factory
13
Moving into new areas/product lines Diversification Projects
Suppliers credit Short term finance
Deferred credit Long term finance
Setting up new units New Projects
14
Project Financing Help improving Corporate Return on Equity
Finance in international financial markets Issue of Euro
International financial institutions World Bank
Policy of Liberalisation, Privatisation and Globalisation Increasing empha
sis on the Private initiative
15
Environmental stability dimension under SPACE Model involves Demand variabili
ty
Company s competitive advantage dimension under SPACE Model involves Product
life cycle
Company s financial strength dimension under SPACE Model involves Leverage
liquidity
Industry strength dimension under SPACE Model involves Profit potential
Match The Following
Plant and machinery cost Foundation and erection charges Cost of factory
building
Preliminary and capital issue expenses Brokerage and commission Brokerag
e and commission
Land and site development cost Cost of laying roads Cost of laying roads
Building cost Cost of factory building Foundation and erection charges
SET 1
Question The objectives of the funds flow statement is as follows :-
Correct Answer To help to understand the changes in assets as well as a
sset sources which are not revealed by the income statement , To find out the us
es of loans raised by the business , To indicate the financial strength and weak
ness of the business
Your Answer To find out the uses of loans raised by the business , To help t
o understand the changes in assets as well as asset sources which are not reveal
ed by the income statement , Helps to prepare financial statements
Question Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Your Answer Inflow of cash
Question Every project involves financial outlay which can be referred to
as :-
Question The Detailed Project report spells out the modus operandi for th
e implementation of the Project and the realization of the Project objectives.
Correct Answer True
Question As the plant capacity increase, the investment cost unit capacit
y ________.
Correct Answer Decreases
Your Answer Decreases
Question Internal sources of funds are :-
Correct Answer Funds from operation , Loss on sale of fixed assets , Go
odwill written off
Your Answer Funds from operation , Loss on sale of fixed assets
Question End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made
and quantity and volume is arrived at
Your Answer A list of industries wherein the product is used is made and qua
ntity and volume is arrived at
Your Answer Purchase of fixed assets , Payment of long term loans
Question In small scale organisation, requirement of working capital is q
uite high due to high amount of overheads, high buying costs and high selling co
st.
Correct Answer True
Your Answer True
Question Longer the duration of production cycle, higher the requirement

of ________.
Correct Answer Working capital
Your Answer Working capital
Question Sanctioned bank limits is categorised under :-
Your Answer Production, Sales and Profitability
Question Cost of fencing comes under the ________ category of the Project
report.
Correct Answer Land and site development
Your Answer Land and site development
Question Trend projection method is the important technique for forecasti
ng demand.
Correct Answer True
Question The emphasis of a finance manager should be on taking a synergis
tic view of the project rather than looking at it only from the financial aspect
s.
Correct Answer True
Question The basic difference between the feasibility study report and __
______ is the level of accuracy and degree of detail.
Correct Answer Detailed Project report
Your Answer Detailed Project report
Question Delays in infrastructure Development by State Agencies may lead
to :-
Your Answer Cost and time overrun
Question Location of the factory comes under the ________ category of the
Project report.
Your Answer General
Question Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans , Internal accruals
Question Market potential should be determined under the Marketing aspect
of the Project report.
Correct Answer True
Question ________ tries to have what the customer will want- where, when,
in what form and at what price.
Question A project objective which states What "achieving it " would cost
is known as :-
Question A project objective which states "What is to be viewed" is term
ed as :-
Your Answer Social aspect
Question Nominal maximum capacity is the capacity that is technically att
ainable and this corresponds to the supplier s guaranteed capacity.
Correct Answer True
Your Answer True
Question In order to meet the cost of large project, the technique of ___
_____ has been developed so that the financial commitment and risks associated w
ith a project are shared between the project sponsor and the lending institution
s.
Correct Answer Limited recourse financing
Your Answer Long term financing
Correct Answer That it involves current outlay of funds in expectation
of future benefits
Your Answer That it involves current outlay of funds in expectation of futur
e benefits
Question Past trend method of Commercial appraisal technique is :-
Correct Answer Adopted as a guide depending on the consumption pattern
of the society as a whole
Your Answer Adopted as a guide depending on the consumption pattern of the s
ociety as a whole
Question The norms for providing open areas have to be strictly followed
for safety of labour and allow sufficient space for outflow of effluents safely
in case of :-
Correct Answer Chemical unit
Your Answer Chemical unit
Question Short supplies of materials may lead to :-
Question Investors who invest in the debentures of the company are the __
______ of the company.
Correct Answer Creditors
Your Answer Creditors
Question As per the GE s Stop Light Matrix, Products may justify substant
ial commitment of funds where there is :-
Correct Answer Strong Business Strength and high Industry attractivenes
s , Average Business strength and high Industry attractiveness
Your Answer Strong Business Strength and high Industry attractiveness , Aver
age Business strength and high Industry attractiveness

Question The industrial concern earned profits by increasing the sales vo
lume under the :-
Correct Answer Sales concept
Your Answer Sales concept
Question The BCG Matrix analysis various products of the organisation i
n the terms of Business strength and Industry Attractiveness.
Correct Answer False
Question Detailed Project Report is generally prepared from a ________ re
port with additional information.
Correct Answer Feasibility
Your Answer Feasibility
Question Delay in arrival of domestic/foreign machinery and technicians m
ay lead to :-
Question Miscellaneous expenditure is written on the asset side of the Ba
lance sheet.
Correct Answer True
Question General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product , Loca
tion of the factory
Your Answer Name of the Industrial concern , Proposed product , Location of
the factory
Question A Project is a temporary endeavor to achieve some specific objec
tives within a :-
Correct Answer Predefined time
Your Answer Predefined time
Question While choosing the location for a project, the following factors
should be considered :-
Correct Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factors
Your Answer Proximity to raw materials and markets , Availability of infrast
ructure , Government policies and other factors
Question The sources of long term and medium term finance are :-
Correct Answer Equity shares , Public deposit
Your Answer Equity shares , Public deposit
Question The cost which change in the same proportion in which the level
of production changes is known as :-
Correct Answer Variable cost
Your Answer Variable cost
Question The second phase of the technical appraisal which focuses upon a
ppraising the likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Project imple
mentation
Your Answer Problems faced during the Construction and Project implementatio
n
Question The third phase of the technical appraisal which focuses upon ap
praising the likely technical gaps consists of :-
Correct Answer Problems pertaining to the period when the project is in
operation
Your Answer Problems pertaining to the period when the project is in operati
on
SET 2
Question Under the SPACE Model, Customer loyalty is determined under the ___
_____ dimension.
Correct Answer Company s competitive advantage
Your Answer Company s competitive advantage
Question It is mandatory for each unit to obtain necessary clearance from Po
llution Control Authorities before setting up any project.
Correct Answer True
Your Answer False
Question A project objective which states "What is to be viewed" is termed
as :-
Question ________ tries to have what the customer will want- where, when, in
what form and at what price.
Question Debt Service Coverage Ratio is one of the most important ratios cal
culated by the bankers or financial institutions giving long term finance to the
organisation.
Correct Answer True
Question The second phase of the technical appraisal which focuses upon appr
aising the likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Project implementa
tion
Your Answer Problems faced during the Construction and Project implementatio
n
Correct Answer True
Question Land and site development cost includes cost of :-
Correct Answer Gates
Question A project objective which states What "achieving it " would cost is
known as :-
Question Disposal of fixed assets is categorised under :-
Correct Answer Miscellaneous
Your Answer Miscellaneous
Question The emphasis of a finance manager should be on taking a synergistic
view of the project rather than looking at it only from the financial aspects.
Correct Answer True
Question Every project involves financial outlay which can be referred to as
:-
Question ________ occupies a unique position in the macro economic developme
nt which helps in induction of new technology and facilitates, greater efficienc
y as well as higher productivity.
Correct Answer That it involves current outlay of funds in expectation of fu
ture benefits
e benefits
Your Answer Interest on deferred payments
Correct Answer It determines financial consequences of the business operatio
ns , It enables the firm to plan its financial resources properly , It helps as
a reliable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations
, It considers non-fund transactions , It enables the firm to plan its financial
resources properly
Correct Answer True
Your Answer True
Question In the BCG Matrix "DOGS" indicate products which are generally duri
ng the stage of Decline of a Product Life Cycle.
Correct Answer True
Your Answer Purchase of fixed assets , Payment of long term loans , Issue of
new machinery
Question Debt Equity ratio is a Solvency ratio .
Correct Answer True
Correct Answer True
Question A project objective can be said to have the following dimensions vi
z.:
Question Liabilities side of Balance sheet includes :-
Correct Answer Unsecured loans
Question The rate of discount which would equate the present value of invest
ments to the present value of benefits over the life of the project is known as
:-
Your Answer Life cycle
Question After the SPACE chart is constructed, we would normally get any one
of the following basic strategic postures :-

Question ________ is the summary of cash book or Receipts and Payments state
ment.
Question The point at which the unit neither earns profit nor incurs loss is
known as :-
Correct Answer Break Even Point
Your Answer Break Even Point
Question The various aspects which need to be considered while assessing Pro
ject finance financing are :-
Correct Answer Environmental factors , Risk involved , Managerial compensati
on
Your Answer Environmental factors , Risk involved , Managerial compensation
Question Casual methods of Demand forecasting consists of

Question Under _______ method, the forecasts are modified in the light of ob
served errors.
Your Answer Exponential smoothing
Correct Answer Item of current liabilities , Added back to the profit as per
profit and loss account to arrive at operating profits
Your Answer Added back to the profit as per profit and loss account to arriv
e at operating profits , Item of current assets , Item of working capital
Question Retained earnings indicates that whatever profits are earned by the
company are not distributed by it by way of ________ but are kept aside for use
in future for expansion or other purpose.
Question The ratio that roughly measures the company s potential reserve of
cash is termed as :-
Question Name and designation of the chief executive comes under the _______
_ category.
Your Answer General
Your Answer Cables
Question In the Cash flow statement, the sources of funds include
Correct Answer Share Issue
Your Answer Share Issue
SET 3
Question Land and site development comes under the cost aspect of the Projec
t report.
Correct Answer True
Question Location of the factory comes under the :-
Correct Answer General category
Your Answer General category
Question The sources of funding have expanded from banks, insurance companie
s and multilateral agencies to include the :-
Correct Answer Capital market
Your Answer Debt market
Question Cost of overheads include :-
Correct Answer Cost of repairs and maintenance
Your Answer Cost of electricity
Question The Detailed Project report spells out the modus operandi for the i
mplementation of the Project and the realization of the Project objectives.
Correct Answer True
Your Answer True
Question Debt Service means payment of installments and interest against an
amount borrowed as per terms of loan.
Correct Answer True
Your Answer True
Question The ratios of one organisation compared with the ratios of the same
organisation is termed as inter-firm comparison.
Question Depreciation is sometimes treated as ________ funds.
Correct Answer Source
Question Excessive expenditures on foreign technicians leads to ________.
Question The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer Stars , Question marks
Your Answer Stars , Question marks , Invest
Question Sensitivity analysis consists of assessing the degree of risk.
Correct Answer True
Your Answer Profit and Loss Account , Auditors report , Balance Sheet
Question Trend Projection method of demand forecasting consists of :-
Correct Answer Linear Relationship , Exponential Relationship , Polynomial R
elationship
Your Answer Linear Relationship , Chain ratio Relationship , Exponential Rel
ationship
Question Delay in arrival of domestic/foreign machinery and technicians may
lead to :-
Your Answer Profit maximisation
Correct Answer Adopted as a guide depending on the consumption pattern of th
e society as a whole
Your Answer Adopted as a guide depending on the consumption pattern of the s
ociety as a whole
Question Limitations of fund flow statement are :-
Correct Answer It does not provide any new information but only rearranges t
he various facts , It does not consider non-fund transactions
Your Answer It does not consider non-fund transactions , It does not help in
determining future requirement of funds , It does not provide any new informati
on but only rearranges the various facts
Question As the plant capacity increase, the investment cost unit capacity _
_______.
Your Answer Increases
Question Preoperative expenses includes :-
Correct Answer Bank guarantees
Your Answer Brokerage on capital issue
Question In order to meet the cost of large project, the technique of ______
__ has been developed so that the financial commitment and risks associated with
a project are shared between the project sponsor and the lending institutions.
Your Answer Limited recourse financing
Question For computing Interest coverage ratio, Profit after Interest and ta
xes are taken into account.
Question The ratio which covers those assets which can be converted into cas
h immediately is known as :-
Correct Answer Quick ratio
Your Answer Current ratio
Question Management category of Visit report consists of :-
Correct Answer Managing Director , Institutional nominees , Committees of th
e board
Your Answer Managing Director , Electrical engineers , Institutional nominee
s
Question General Electric Stop Light Matrix analyses products in terms of :-
Correct Answer Business strength and Industrial Attractiveness
Your Answer Relative Market share and Industry Growth rate
Question The basic document for facilitating Project financing is the :-

Your Answer Detailed Project report
Question The ________ market is longer the order of the day since this is an
era of professionalization and specialised services are available at cost.
Correct Answer Monopolistic
Your Answer Monopolistic
Question Ratio should be computed on the basis of inter-related figures whic
h have a cause and effect relationship.
Correct Answer True
Question Demand technique forecasting of Commercial appraisal includes :-
Correct Answer Future demand of the product , Proper survey of the product ,
Future availability and supply of the product
Your Answer Future demand of the product , Export market , Future availabili
ty and supply of the product
Question Having decided on the location and product, the promoter takes into
account the ________ that is to be adopted for producing the product.
Correct Answer Manufacturing process and technology
Your Answer Manufacturing process and technology
Question Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer Trend Projection method , Moving Averages method
Your Answer Trend Projection method , Moving Averages method
Question More accurate the estimation of the level of current assets and cur
rent liabilities, more accurate will be estimation of the requirement of _______
_.
Question Defaults category of the Project report may be in respect of :-
Correct Answer Term loans , Principal , Interest
Your Answer Term loans , Principal , Interest
Question If the organisation is a trading organisation, the requirement of w
orking capital will be on the lower side.
Question Cost of fencing comes under the ________ category of the Project re
port.
Your Answer Building cost
Question Disposition of funds includes :-
Correct Answer Increase in working capital , Preliminary expenses , Dividend
Your Answer Increase in working capital , Preliminary expenses , Preliminary
expenses written off
Question Sources of funds includes :-
Correct Answer Depreciation , Preliminary expenses written off , Increase in
secured borrowing
Your Answer Depreciation , Preliminary expenses written off , Increase in se
cured borrowing , Preliminary expenses
Question The Projects which are undertaken to manufacture certain products w

hich are being used as raw material by the existing units is known as :-
Correct Answer Backward Integration Projects
Your Answer Backward Integration Projects
Question In the GE s Stop Light Matrix, when ________ situation prevails , P
roducts call for divestment.
Correct Answer Average Business Strength and Low Industry attractiveness
Your Answer Weak Business strength and high Industry attractiveness
Question Investors who invest in the debentures of the company are the _____
___ of the company.
Question Debt Service coverage ratio may be considered to be one of the most
important ratios calculated by the :-
Correct Answer Bankers , Financial Institutions
Your Answer Shareholders , Bankers , Creditors
Question Dissentions among the promoters is a :-
Correct Answer Management problem
Your Answer Management perception
Question Goods purchased on credit ________ in flow of funds.
Correct Answer Does not result
Your Answer Does not result
Question The secondary data is collected through market survey, specific for
the project being appraised.
Your Answer False
Question Profit is the result of customer satisfaction, indeed customer deli
ght under the :-
Correct Answer Marketing concept
Your Answer Marketing concept
Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwil
l written off
Your Answer Funds from operation , Goodwill written off , Funds from long te
rm loans
SET 4
Question The permanent requirement of working capital should be financed out
of :-
Correct Answer Debentures , Cash Profits , Shares
Your Answer Debentures , Cash Profits , Shares
Your Answer Equity shares , Bridge loan , Public deposit
Question The emphasis of the Banks and Financial institutions particularly i
n India has shifted from Sanctions , Disbursements and Security-orientation
to Recovery/Recycling and :-
Correct Answer Activity orientation
Your Answer Activity orientation
Question Technology, design, layout of the plant as well as inputs and infra
structural facilities are to be considered under :-
Correct Answer Technical appraisal
Your Answer Financial appraisal
Question Detailed Project Report is generally prepared from a ________ repor
t with additional information.
Question A high debt equity ratio may indicate that the financial stake of t
he creditors is more than that of the owners.
Correct Answer True
Your Answer True
Question The formula for Break Even Point is :-
Correct Answer Fixed cost / ( Sales Price - Variables)
Your Answer (Profit after tax +Depreciation + Interest)/ Interest
Question Receivables is categorised under :-
Correct Answer Current assets and liabilities
Your Answer Material inputs and utilities
Question Ratios relating to working capital are :-
Correct Answer Current ratio , Internal measure , Quick ratio
Your Answer Current ratio , Debt Equity ratio , Internal measure
Question Longer the duration of production cycle, higher the requirement of
________.
Your Answer Fixed assets
Question In the Detailed Project Report, Management aspects includes :-
Correct Answer Determination , Organisation Building , Person / system orien
ted
Your Answer Organisation Building , Person / system oriented , Promoter s eq
uity / stake
Question Financial analysis based on accounting ratios will give mis-leading
results if the effects of changes in price level are not taken into account.
Correct Answer True
Question In the Detailed Project Report, Technical aspects includes :-
Correct Answer Plant capacity , Quality standards , Raw material requirement
Your Answer Plant capacity , Quality standards , Raw material requirement
Your Answer Decrease in funds
Question Building cost consists of :-
Correct Answer Factory building , Auxiliary buildings , Administrative block
Your Answer cost of development , Factory building , Auxiliary buildings
Question Sometimes the term ________ is interpreted as cash equivalent i.e.
cash and marketable securities.
Correct Answer Fund
Question Name of the finance manager comes under the Project organisation ca
tegory of the Project report.
Correct Answer True
Question Change in the project concept itself may lead to cost and time over
run.
Correct Answer True
Question The maximum Seed Capital assistance provided by IDBI under the proj
ect will be restricted to 50% of the required promoter s contribution or Rs. 50
lakhs whichever is lower.
Question Trend projection method is the important technique for forecasting
demand.
Correct Answer True
Question Production and sales aspect of Visit report consists of :-
Correct Answer Utilisation of installed capacity , Input availability , Sale
s trends
Your Answer Utilisation of installed capacity , Input availability
Question The sources of cash are :-
Correct Answer Cash from operations , Sale of machinery , Issue of new share
s
Your Answer Purchase of fixed assets , Cash from operations , Sale of machin
ery
Question External sources of cash are as follows :-
Correct Answer Issue of new shares , Long term loans , Short term borrowings
Your Answer Issue of new shares , Long term loans , Short term borrowings
Question Production line diagrams show the organisation structure of the pro
ject along with information on location, personnel required for various departme
nts, and their inter-relationship.
Question ________ is a current asset
Correct Answer Book debts
Question The company having ________, is appropriate for the strategic postu
re of Defensive under the SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial strengt
h and belongs to a not so attractive industry, operating in an unstable environm
ent
Your Answer High financial strength, high industrial strength, enjoying a co
mpetitive advantage and belonging to an attractive industry, operating in a rela
tively stable environmental conditions
Question Management aspect of detailed project report includes
Correct Answer Organisation structure
Your Answer Demand forecasting
Question ________ profitability reduces the strain on working capital.
Correct Answer High
Question The following are the sources of funds :-

Correct Answer Operating Profit , Non operating Income
Your Answer Operating Profit , Operating Loss , Non operating Income
Question The cash flow of all the years during the expected life of the proj
ect are discounted at a pre-determined cut off rate and :-
Correct Answer Net Present value is obtained
Your Answer Internal rate of return is obtained
Correct Answer To find out the uses of loans raised by the business , To ind
icate the financial strength and weakness of the business , To help to understan
d the changes in assets as well as asset sources which are not revealed by the i
ncome statement
Your Answer To find out the uses of loans raised by the business , To indica
te the financial strength and weakness of the business , To help to understand t
he changes in assets as well as asset sources which are not revealed by the inco
me statement
Question Cost of materials include :-
Correct Answer Cost of components and consumable stores
Your Answer Cost of electricity
Question The Detailed Project report must indicate the gestation period of t
he project.
Correct Answer True
Question Strategic Position and Action Evaluation Model :-
Correct Answer Is an approach to hammer out an appropriate strategic posture
for a firm and its individual business
Your Answer Which is highly respected for the sophistication, maturity and q
uality in its planning systems
Select The Blank
Question Location of the factory comes under the ________ category of the Pr
oject report.
Your Answer General
Select The Blank
Question Retained earnings is a source of ________ finance.
Correct Answer Internal
Your Answer Internal
Correct Answer Name of the Industrial concern , Proposed product , Location
of the factory
the factory
Question Short term finance is normally for a period upto ________ year.
Correct Answer One
Question Appointments made at senior level during the half-year is categoris
ed under :-
Correct Answer Organisation and management
Your Answer Current assets and liabilities
Question Commission outstanding is ________ of funds.
Correct Answer Application
Your Answer Application
Question The statement which shows the movement of cash into and out of firm
s kittie is known as
Your Answer Profit and Loss statement
Question Cost of utilities include :-
Correct Answer Cost of electricity
Your Answer Cost of components and consumable stores
Question Marketing aspect of Detailed Project report includes :-
Correct Answer Demand forecasting
Your Answer Detailed Project Engineering
Question In both the extreme situations of trade cycles i.e. Inflation and d
epression, requirement of working capital may be high.
Correct Answer True
Your Answer False
Question While choosing the location for a project, the following factors sh
ould be considered :-
Correct Answer Proximity to raw materials and markets , Availability of infr
astructure , Government policies and other factors
Your Answer Proximity to raw materials and markets , Plant capacity , Availa
bility of infrastructure
SET 5
Correct Answer True
Question A project can be regarded as the sum of the activities directed tow
ards a :-
Correct Answer Specific result
known as :-
Question There is a need for studying Project finance both for the lenders a
s well as the borrowers as both of them have equal stake in making the Project a
success.
Correct Answer True
Your Answer Share capital , Term loans
Correct Answer True
Correct Answer Adopted as a guide depending on the consumption pattern of th
e society as a whole
Question Demographic market appraisal answers to
Correct Answer Who they are?
Your Answer Purchase of fixed assets , Payment of long term loans
Question In the Cash flow statement, the sources of funds include :-
Correct Answer Development rebate reserve
Your Answer Development rebate reserve
Question More accurate the estimation of the level of current assets and cur
rent liabilities, more accurate will be estimation of the requirement of _______
_.
ted
Your Answer Determination , Organisation Building , Person / system oriented

Question ________ capital represents permanent capital.
Correct Answer Equity
Your Answer Preference
Question Ratio analysis is a widely used tool of :-
Correct Answer Financial analysis
Your Answer Portfolio analysis
s trends
Your Answer Utilisation of installed capacity , Input availability , Sales t
rends
Correct Answer Item of current liabilities , Added back to the profit as per
profit and loss account to arrive at operating profits
Your Answer Item of current liabilities , Added back to the profit as per pr
ofit and loss account to arrive at operating profits
Correct Answer True
Question Export Market is a technique used for forecasting under Commercial
appraisal technique.
Correct Answer True
on
Question Debt Service means payment of installments and interest against an

amount borrowed as per terms of loan.
Correct Answer True
Correct Answer One
Correct Answer True
Your Answer True
Question Details regarding Bridge finance comes under the ________ category
of Project report.
Correct Answer Financing plan
Your Answer Cost aspect
:-
Question Net Working Capital means :-
Correct Answer Current assets less Current liabilities
Your Answer Capital Budgeting
Question ________ in liabilities involves inflow of funds.
Your Answer Decrease
ture benefits
e benefits
elationship
Your Answer Linear Relationship , Exponential Relationship , Polynomial Rela
tionship
Your Answer It does not provide any new information but only rearranges the
various facts , It does not consider non-fund transactions
Question Bilateral aid is form of external aid from one government to another
government which is usually project specific.
Correct Answer True
Question The statement which shows the movement of cash into and out of firm
s kittie is known as
secured borrowing
Your Answer Depreciation , Preliminary expenses written off , Increase in se
cured borrowing
Question Position regarding requirement and training of operational staff co
mes under the ________ category of Project report.
Correct Answer Project organisation
Your Answer Project organisation
Question A smaller unit into which the overall requirement of capital of a c
ompany is sub-divided is termed as ________.
Correct Answer Share
Question Banks and Financial Institutions, world-wide, are now financing pro
jects with strategies and terms that would have been hard to believe/imagine jus
t a few years back.
Correct Answer True
as :-
Question For computing Interest coverage ratio, Profit after Interest and tax
es are taken into account.
Your Answer Profit and Loss Account , Balance Sheet
SET 6
Question Trend projection method is the important technique for forecasting
demand.
Correct Answer True
Question The BCG Product Portfolio Matrix :-
Correct Answer Is a tool for strategic ( product ) planning and resource all
ocation
Your Answer Is a tool for strategic ( product ) planning and resource alloca
tion
Question A market survey generally is a ________ survey.
Correct Answer Sample
Your Answer Primary
ture benefits
e benefits
Question Nominal maximum capacity is the capacity that is technically attain
able and this corresponds to the supplier s guaranteed capacity.
Correct Answer True
Question Cost of the Project encompasses :-
Correct Answer The total of all items of outlay associated with a project
Your Answer The total of all items of outlay associated with a project
Question There is a need for studying Project finance both for the lenders a
s well as the borrowers as both of them have equal stake in making the Project a
success.
Correct Answer True
Your Answer True
e board
Your Answer Managing Director , Institutional nominees , Committees of the b
oard
:-
Your Answer Financial arrangement
Question Debt service coverage ratio indicates whether cash earned is suffic
ient for debt service.
Correct Answer True
Your Answer False
on
Your Answer Environmental factors , Risk involved , Political issues
Your Answer Operating Profit , Non operating Income
Correct Answer True
Your Answer True
hich require the products of existing units as raw material is known as :-
Correct Answer Forward Integration Projects
Your Answer Backward Integration Projects

Your Answer Future demand of the product , Proper survey of the product , Ex
port market , Future availability and supply of the product
Question Details regarding Administrative / controlling office comes under t
he ________ category.
Your Answer Cost aspect
secured borrowing
Your Answer Preliminary expenses written off , Increase in secured borrowing
known as :-
Question The profit earned from operations of the project during life of the
project is known as :-
Correct Answer Cash inflow
Your Answer Profit after appropriation
Question Financial and economic aspect of the Visit report consists of :-
Correct Answer Company s financial year , Impact of Government policies on c
ompany operations , Comments on the last published accounts
Your Answer Company s financial year , Impact of Government policies on comp
any operations , Sales trends
Correct Answer True
as :-
Correct Answer True
Your Answer True
Your Answer Share capital , Term loans , Internal accruals
Correct Answer Interest on term loans
Question Gross Working Capital means :-
Correct Answer Current assets
Your Answer Current assets less Current liabilities
Correct Answer Identification of Project - Project Appraisal - Negotiations
for loans
Your Answer Identification of Project - Project Appraisal - Negotiations for
loans
Correct Answer True
Your Answer True
Question Investors who invest in the debentures of the company are the _____
___ of the company.
________.
Question Cost and time overrun of the project may lead to loss on account of
lost market opportunities.
Correct Answer True
Your Answer True
Question The ratio which indicates the ability of the company to meet curren
t obligations is termed as :-
Correct Answer Current ratio
Question The third phase of the technical appraisal which focuses upon appra
ising the likely technical gaps consists of :-
Correct Answer Problems pertaining to the period when the project is in oper
ation
Your Answer Problems pertaining to the period when the project is in operati
on
Question Technical appraisal is basically concerned with :-
Correct Answer Technology , Layout of the plant , Design of the plant
Your Answer Technology , Layout of the plant , Design of the plant
Question Market potential should be determined under the Marketing aspect of
the Project report.
Correct Answer True

Question BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer Relative Market share and Industry Growth rate
Your Answer Relative Market share and Industry Growth rate
Question Preliminary expenses include :-
Correct Answer Drafting of Memorandum expenses
Your Answer Drafting of Memorandum expenses
SET 7
Question A smaller unit into which the overall requirement of capital of
a company is sub-divided is termed as ________.
Question The formula for Break Even Point is :-
Correct Answer Fixed cost / ( Sales Price - Variables)
report.
Your Answer Financing plan
Question Cost and time overrun of the project may lead to loss on account
of lost market opportunities.
Correct Answer True
Question Land and site development comes under the cost aspect of the Pro
ject report.
Correct Answer True
Question In the BCG Matrix, the key term of Cash Cows require further com
mitment of funds.
Correct Answer To find out the uses of loans raised by the business , T
o indicate the financial strength and weakness of the business , To help to unde
rstand the changes in assets as well as asset sources which are not revealed by
the income statement
Your Answer To indicate the financial strength and weakness of the business
, To help to understand the changes in assets as well as asset sources which are
not revealed by the income statement , Helps to prepare financial statements
Question Depreciation method may be :-
Correct Answer Straight line method
Question A project objective can be said to have the following dimensions
viz.:
Correct Answer Finance cost aspect , Strategic perspective , Time span
Question A project can be regarded as the sum of the activities directed
towards a :-
Question Details regarding Administrative / controlling office comes unde
r the ________ category.
Question Retained earnings is a source of ________ finance.
Correct Answer Future demand of the product , Proper survey of the prod
uct , Future availability and supply of the product
Your Answer Future demand of the product , Proper survey of the product , Fu
ture availability and supply of the product
Question The temporary requirement of working capital can be financed out
of :-
Correct Answer Inter-corporate Deposits , Commercial Papers
Your Answer Shares , Debentures , Commercial Papers
Question Distribution channels for the product is categorised under :-
Question ________ occupies a unique position in the macro economic develo
pment which helps in induction of new technology and facilitates, greater effici
ency as well as higher productivity.
Correct Answer Increase in working capital , Preliminary expenses , Div
idend
Your Answer Increase in working capital , Dividend , Preliminary expenses wr
itten off
Question Delay in recruitment of staff may lead to cost and time overrun
Correct Answer True
of future benefits
e benefits
ructure
Question Financial aspect of Detailed Project report includes :-
Correct Answer Fixation of means of financial structure
Question The sources of funding have expanded from banks, insurance compa
nies and multilateral agencies to include the :-
Question Ratio analysis is a technique of planning and control.
Correct Answer True
as :-
Question Interest and Dividend are to be considered while calculating Ope
rating ratio.
Question For computing Interest coverage ratio, Profit after Interest and
taxes are taken into account.
Correct Answer Factory building , Auxiliary buildings , Administrative
block
to :-
Correct Answer Plant capacity , Quality standards , Raw material requir
ement
Question Time Series Projection Methods of Demand forecasting consists of
:-
Question Name and designation of the chief executive comes under the ____
____ category.
ay lead to :-
Question The advantage of secondary sources of data is that it is readily
and economically available.
Correct Answer True
Question Gross Working Capital means :-
Correct Answer Current assets
Your Answer Current assets less Current liabilities
Correct Answer One
Your Answer Balance Sheet
Question In both the extreme situations of trade cycles i.e. Inflation an
d depression, requirement of working capital may be high.
Correct Answer True
SET 8
Correct Answer True
Question Production line diagrams show the organisation structure of the
project along with information on location, personnel required for various depar
tments, and their inter-relationship.
Question The second phase of the technical appraisal which focuses upon a
ppraising the likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Project imple
mentation
Question In BCG Matrix "STARS" indicate :-
Correct Answer Products which enjoy a high market share as well as a hi
gh growth rate
Your Answer Products which enjoy a high market share as well as a high growt
h rate
Correct Answer Managing Director , Institutional nominees , Committees
of the board
Question A Project has a ________ represented by growth, maturity and dec
ay.
is known as :-
Correct Answer Sale of machinery , Cash from operations , Issue of new
shares
Your Answer Cash from operations , Sale of machinery , Issue of new shares

Question ________ is the summary of cash book or Receipts and Payments st
atement.
Your Answer Trial balance
Correct Answer True
Question A Project is a temporary endeavor to achieve some specific objec
tives within a :-
Correct Answer Predefined time
s.
Correct Answer True
Question Cost of utilities include :-
Correct Answer Cost of electricity
Question In BCG Matrix "QUESTION MARKS" indicate :-
Correct Answer Products which have high growth potential but low market
share
Project report.
Question It is mandatory for each unit to obtain necessary clearance from
Pollution Control Authorities before setting up any project.
Correct Answer True
odwill written off
Your Answer Funds from operation
age Business strength and high Industry attractiveness , Average Business Streng
th and Low Industry attractiveness
Your Answer Equity shares , Bridge loan , Working capital loan
Question The cost factors of the product mixed is also taken into account
to arrive at cost at various levels of production and its cost impact of the ma
nufacturing.
Correct Answer True
Question The various aspects which need to be considered while assessing
Project finance financing are :-
Correct Answer Environmental factors , Risk involved , Managerial compe
nsation
Question Technical aspect of detailed project report includes :-
Correct Answer Detailed Project Engineering
Correct Answer It determines financial consequences of the business ope
rations , It enables the firm to plan its financial resources properly , It help
s as a reliable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations
, It enables the firm to plan its financial resources properly , It helps as a r
eliable guide for the future requirement of funds
Question After the SPACE chart is constructed, we would normally get any
one of the following basic strategic postures :-
Correct Answer Aggressive Posture , Competitive Posture , Defensive Pos
ture
Question Details regarding Internal accruals comes under the ________ cat
egory of Project report.
Your Answer Purchase of fixed assets , Payment of long term loans , Issue of
new machinery
Correct Answer Identification of Project - Project Appraisal - Negotiat
ions for loans
Your Answer Identification of Project - Project Appraisal - Negotiations for
loans
Question Financial analysis based on accounting ratios will give mis-lead
ing results if the effects of changes in price level are not taken into account.
Correct Answer True
Question There is a need for studying Project finance both for the lender
s as well as the borrowers as both of them have equal stake in making the Projec
t a success.
Correct Answer True
ed as :-
Correct Answer True
Correct Answer Issue of new shares , Long term loans , Short term borro
wings
Question The Projects which are undertaken for further enhancing/augmenti
ng the existing capacity is known as :-
Correct Answer Expansion Projects
Question Sometimes the term ________ is interpreted as cash equivalent i.
e. cash and marketable securities.
Correct Answer Fund
Your Answer Investment
SET 9
Question 1 The advantage of secondary sources of data is that it is readily an
d economically available.
Correct Answer True
Question2 In small scale organisation, requirement of working capital is qui
te high due to high amount of overheads, high buying costs and high selling cost
.
Correct Answer True
Question3 Banks and Financial Institutions, world-wide, are now financing pr
ojects with strategies and terms that would have been hard to believe/imagine ju
st a few years back.
Correct Answer True
Question 4 ________ is a current asset
Your Answer Furniture
Question 5 Trend Projection method of demand forecasting consists of :-
elationship
Your Answer Linear Relationship , Exponential Relationship , Polynomial Rela
tionship
Question 6 Delays in infrastructure Development by State Agencies may lead t
o :-
Question 7 Technical aspect of detailed project report includes :-
Correct Answer Detailed Project Engineering
Your Answer Detailed Project Engineering
Question 8 Sources of funds includes :-
secured borrowing
Your Answer Preliminary expenses written off , Increase in secured borrowing
Question 9 Delay in arrival of domestic/foreign machinery and technicians may

lead to :-
Question 10 A smaller unit into which the overall requirement of capital of a
company is sub-divided is termed as ________.
Question11 A project objective which states "What is to be viewed" is terme
d as :-
Question 12 Sewerage and drainage cost of the project is categorised under :-
Correct Answer Building cost
Question13 Internal sources of funds are :-
l written off
Your Answer Funds from operation , Goodwill written off
Question14 In the Detailed Project Report, Management aspects includes :-
ted
Question15 Short term finance is normally for a period upto ________ year.
Correct Answer One
Question16 Current assets includes stock-in-process.
Correct Answer True
Question17 The basic characteristic of a project is :-
ture benefits
e benefits
Question18 Time Series Projection Methods of Demand forecasting consists of :
-
Your Answer Trend Projection method , Moving Averages method
Question 19 ________ is a current liability.
Question20 Managerial problems in a project are the most pervasive.
Correct Answer True
Question21 Longer the duration of production cycle, higher the requirement o
f ________.
Question22 Retained earnings is a source of ________ finance.
Your Answer Short term
Question23 ________ is the summary of cash book or Receipts and Payments sta
tement.
Your Answer Trial balance
Question24 In the BCG Matrix, the key term of Cash Cows require further comm
itment of funds.
Question25 Cost and time overrun of the project may lead to loss on account
of lost market opportunities.
Correct Answer True
Question26 A project objective which states What "achieving it " would cost
is known as :-
Question27 Casual methods of Demand forecasting consists of :-
Question 28 In BCG Matrix "STARS" indicate :-
Correct Answer Products which enjoy a high market share as well as a high gr
owth rate
Your Answer Products which enjoy a high market share as well as a high growt
h rate
Question 29 Psychographic market appraisal answers to :-
Correct Answer Why they buy?
Question30 Production line diagrams show the organisation structure of the p
roject along with information on location, personnel required for various depart
ments, and their inter-relationship.
Question31 While choosing the location for a project, the following factors
Question32 The cost which change in the same proportion in which the level o
f production changes is known as :-
Correct Answer Variable cost
Question33 Goods purchased on credit ________ in flow of funds.
Question34 Ratios relating to working capital are :-
Your Answer Current ratio , Debt Equity ratio , Quick ratio
Question35 Appointments made at senior level during the half-year is categor
ised under :-
Question36 Cost of the Project encompasses :-
Your Answer The total of all items of outlay associated with a project
Question37 Production and sales aspect of Visit report consists of :-
s trends
Question39 Every project involves financial outlay which can be referred to
as :-
Question 40 General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product , Location
of the factory
the factory
Question 41 The data for ratio analysis is obtained from :-
Question42 Short supplies of materials may lead to :-
Question43 After the SPACE chart is constructed, we would normally get any o
ne of the following basic strategic postures :-
Question 44 ________ occupies a unique position in the macro economic develop
ment which helps in induction of new technology and facilitates, greater efficie
ncy as well as higher productivity.
Question45 Infrastructural projects include :-
Question46 Name and designation of the chief executive comes under the _____
___ category.
SET 10
Question Details regarding Internal accruals comes under the ________ cat
egory of Project report.
ement
Question In order to meet the cost of large project, the technique of ___
_____ has been developed so that the financial commitment and risks associated w
ith a project are shared between the project sponsor and the lending institution
s.
Question Debt Service coverage ratio may be considered to be one of the m
ost important ratios calculated by the :-
Question Cost of laying roads comes under :-
Correct Answer Land and site cost
Your Answer Market research expenses
nufacturing.
Correct Answer True
Question Retained earnings indicates that whatever profits are earned by
the company are not distributed by it by way of ________ but are kept aside for
use in future for expansion or other purpose.
Correct Answer Determination , Organisation Building , Person / system
oriented
Your Answer Organisation Building , Person / system oriented , Promoter s eq
uity / stake
Correct Answer True
Question General Electric Stop Light Matrix analyses products in terms of
:-
Your Answer Company s competitive advantage and Company s financial strength
s.
Correct Answer True
ture
Question The ratios of one organisation compared with the ratios of the s
ame organisation is termed as inter-firm comparison.
Question Under ________ method, the forecasts are modified in the light o
f observed errors.
Your Answer Cobb Douglas Relationship
Question The Detailed Project report must indicate the gestation period o
f the project.
Correct Answer True
Question Delay in recruitment of staff may lead to cost and time overrun
Correct Answer True
to :-
Question The method for evaluating the profitability of industrial projec
ts whose object is to ascertain the period required for recovering the entire in
vestment made in a project is known as :-
Correct Answer Pay back method
Your Answer Pay back method
Select The Blank

Question The rate of discount which would equate the present value of inv
estments to the present value of benefits over the life of the project is known
as :-
report.
Question The ratio that roughly measures the company s potential reserve
of cash is termed as :-
Your Answer Quick ratio
Question The sources of funding have expanded from banks, insurance compa
nies and multilateral agencies to include the :-
Correct Answer True
Question The permanent requirement of working capital should be financed
out of :-
Correct Answer Cash Profits , Shares , Debentures
Question Nominal maximum capacity is the capacity that is technically att
ainable and this corresponds to the supplier s guaranteed capacity.
Correct Answer True
Question Ratio should be computed on the basis of inter-related figures w
hich have a cause and effect relationship.
Correct Answer True
Question In the BCG Matrix "DOGS" indicate products which are generally d
uring the stage of Decline of a Product Life Cycle.
Correct Answer True
Correct Answer Linear Relationship , Exponential Relationship , Polynom
ial Relationship
ay.
viz.:
Your Answer Trend Projection method , Consumption-level method , Moving Aver
ages method
Question The statement which shows the movement of cash into and out of f
irm s kittie is known as :-
SET 11
Correct Answer Public deposit , Equity shares
Your Answer Equity shares , Bridge loan , Working capital loan

idend
Your Answer Increase in working capital , Dividend , Preliminary expenses wr
itten off
Question The company having ________, is appropriate for the strategic po

sture of Conservative under the SPACE approach.
Correct Answer Limited competitive advantage, belonging to a not so att
ractive industry but enjoying financial strength and operating in a relatively s
table environment
Your Answer Limited financial strength, enjoying competitive advantage, belo
nging to attractive industry and operating in a relatively volatile environment
Question A market survey generally is a ________ survey.

Correct Answer Sample
Question The ratio which covers those assets which can be converted into
cash immediately is known as :-
ay lead to :-
Question Having decided on the location and product, the promoter takes i
nto account the ________ that is to be adopted for producing the product.
Your Answer Profit and Loss Account , Balance Sheet , Cash flow statement
Question Technology, design, layout of the plant as well as inputs and in
frastructural facilities are to be considered under :-
Correct Answer Technical appraisal
Question The Detailed Project report must indicate the gestation period o
f the project.
Correct Answer True
Question Interest and Dividend are to be considered while calculating Ope
rating ratio.
Question Ratio should be computed on the basis of inter-related figures w
hich have a cause and effect relationship.
Correct Answer True
is known as :-
Question More accurate the estimation of the level of current assets and
current liabilities, more accurate will be estimation of the requirement of ____
____.
Question The rate of discount which would equate the present value of inv
estments to the present value of benefits over the life of the project is known
as :-
Your Answer Net Present value
nsation
Your Answer Environmental factors , Risk involved , Political issues
Question The advantage of secondary sources of data is that it is readily

and economically available.
Correct Answer True
ed as :-
viz.:
Correct Answer True
Correct Answer Cash from operations , Sale of machinery , Issue of new
shares
Question Profit is the result of customer satisfaction, indeed customer d
elight under the :-
of future benefits
e benefits
atement.
Question Under the SPACE Model, Customer loyalty is determined under the
________ dimension.
Your Answer Average Business Strength and Medium Industry Attractiveness , A
verage Business strength and high Industry attractiveness , Average Business Str
ength and Low Industry attractiveness
Question The ratio which indicates the ability of the company to meet cur
rent obligations is termed as :-
Question The General Electric Company incorporated in the USA, is highly
respected for the sophistication, maturity and quality in its planning systems.
Correct Answer True
Question There is a need for studying Project finance both for the lender
s as well as the borrowers as both of them have equal stake in making the Projec
t a success.
Correct Answer True
Question Sometimes the term ________ is interpreted as cash equivalent i.
e. cash and marketable securities.
Correct Answer Fund
Your Answer Investment
as :-

Correct Answer Determination , Organisation Building , Person / system
oriented

Question It is mandatory for each unit to obtain necessary clearance from
Pollution Control Authorities before setting up any project.
Correct Answer True
Question In BCG Matrix "QUESTION MARKS" indicate :-
Correct Answer Products which have high growth potential but low market
share
Your Answer Products which have high growth potential but low market share
Question Production line diagrams show the organisation structure of the
project along with information on location, personnel required for various depar
tments, and their inter-relationship.
Set 12
Question Borrower s contribution towards Working capital is known as :-
Correct Answer Margin money
Correct Answer Factory building , Auxiliary buildings , Administrative block
Your Answer Factory building , Auxiliary buildings , Administrative block
Question In BCG Matrix " CASH COWS" indicate :-
Correct Answer Products which have high market share but low growth potentia
l
Your Answer Products which have high market share but low growth potential
Question Cost of the Project encompasses :-
Correct Answer True
Correct Answer True
Question It is mandatory for each unit to obtain necessary clearance from Po
llution Control Authorities before setting up any project.
Correct Answer True
Question A project objective can be said to have the following dimensions vi
z.:
Question BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer Relative Market share and Industry Growth rate
Correct Answer High
ture benefits
on
Question "Fly by night" operator mentality is a :-
Correct Answer Management quality
:-
_______.
Question Debt Service coverage ratio may be considered to be one of the most
important ratios calculated by the :-
Your Answer Shareholders , Bankers , Financial Institutions
known as :-
Correct Answer True
Your Answer It does not provide any new information but only rearranges the
various facts , It does not consider non-fund transactions , It does not help in
determining future requirement of funds
Question The third phase of the technical appraisal which focuses upon appra
ising the likely technical gaps consists of :-
Correct Answer Problems pertaining to the period when the project is in oper
ation
Question It is said that a second rate project in the hands of first rate ma
nagement is better than a first rate project in the hands of :-
Correct Answer Second rate management
Question The company having ________, is appropriate for the strategic postu
re of Defensive under the SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial strengt
h and belongs to a not so attractive industry, operating in an unstable environm
ent
Question The BCG Matrix analysis various products of the organisation in t
he terms of Business strength and Industry Attractiveness.
Question Financial and economic aspect of the Visit report consists of :-
Correct Answer Company s financial year , Impact of Government policies on c
ompany operations , Comments on the last published accounts
Your Answer Company s financial year , Impact of Government policies on comp
any operations , Comments on the last published accounts
Correct Answer True
as :-
of :-
Question In the BCG Matrix "DOGS" indicate products which are generally duri
ng the stage of Decline of a Product Life Cycle.
Correct Answer True
Question The construction of National Golden Quadrilateral can be recognised
as Project.
Correct Answer True
Question Under the SPACE Model, Customer loyalty is determined under the ___
_____ dimension.
Question The cost factors of the product mixed is also taken into account to
arrive at cost at various levels of production and its cost impact of the manuf
acturing.
Correct Answer True
Correct Answer True
Correct Answer Plant capacity , Quality standards , Raw material requirement
Your Answer Quality standards , Raw material requirement , Power / telecom f
acilities
elationship
Question Market potential should be determined under the Marketing aspect of
the Project report.
Correct Answer True
Question Ratio analysis is a widely used tool of :-
Correct Answer Financial analysis
Question Preoperative expenses includes :-
Correct Answer Bank guarantees
Question If the organisation is a trading organisation, the requirement of w
orking capital will be on the lower side.
SET 13
Question Cost under-estimation at the project preparation and evaluation sta
ge leads to cost and time over run.
Correct Answer True
of :-
Question Cost and time overrun of the project may lead to loss on account of
lost market opportunities.
Correct Answer True
:-
Correct Answer To find out the uses of loans raised by the business , To ind
icate the financial strength and weakness of the business , To help to understan
d the changes in assets as well as asset sources which are not revealed by the i
ncome statement
Question The second phase of the technical appraisal which focuses upon appr
aising the likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Project implementa
tion
Question The Detailed Project report spells out the modus operandi for the i
mplementation of the Project and the realization of the Project objectives.
Correct Answer True
Your Answer Proximity to raw materials and markets , Plant capacity , Availa
bility of infrastructure
run.
Correct Answer True
Question Name and designation of the chief executive comes under the _______
_ category.
Your Answer Project organisation
Question ________ occupies a unique position in the macro economic developmen

t which helps in induction of new technology and facilitates, greater efficiency
as well as higher productivity.
l written off
Your Answer Funds from operation , Funds from long term loans
Question ________ is that scarce input which financial resources alone canno
t mobilise.
Correct Answer Management
ards a :-
as :-
Correct Answer One
on
Question As per the GE s Stop Light Matrix, Products may justify substantial
commitment of funds where there is :-
Correct Answer Strong Business Strength and high Industry attractiveness , A
verage Business strength and high Industry attractiveness
age Business Strength and Medium Industry Attractiveness , Average Business stre
ngth and high Industry attractiveness
________.
Your Answer Average rate of return is obtained
Question The ratio which indicates the ability of the company to meet curren
t obligations is termed as :-
Correct Answer True
Question In small scale organisation, requirement of working capital is quit
e high due to high amount of overheads, high buying costs and high selling cost.
Correct Answer True
Question The secondary data is collected through market survey, specific for
the project being appraised.
Question General Electric Stop Light Matrix :-
Correct Answer Which is highly respected for the sophistication, maturity an
d quality in its planning systems
Your Answer Which is highly respected for the sophistication, maturity and q
uality in its planning systems
Question Sometimes the term ________ is interpreted as cash equivalent i.e.
cash and marketable securities.
Correct Answer Fund
Question The temporary requirement of working capital can be financed out of

:-
Your Answer Inter-corporate Deposits , Commercial Papers
Correct Answer True
SET 14
Question Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer Identification of Project - Project Appraisal - Negotiations fo
r loans
Question Change in the project concept itself may lead to cost and time overru
n.
Correct Answer True
Question The industrial concern earned profits by increasing the sales volume
under the Correct Answer Sales concept
Question Cost and time overrun of the project may lead to loss on account of l
ost market opportunities.
Correct Answer True
Correct Answer Linear Relationship , Exponential Relationship , Polynomial Rel
ationship
Question Financial analysis based on accounting ratios will give mis-leading r
esults if the effects of changes in price level are not taken into account.
Correct Answer True
Correct Answer To find out the uses of loans raised by the business , To indic
ate the financial strength and weakness of the business , To help to understand
the changes in assets as well as asset sources which are not revealed by the inc
ome statement
Question The maximum Seed Capital assistance provided by IDBI under the projec
t will be restricted to 50% of the required promoter s contribution or Rs. 50 la
khs whichever is lower.
Question Every project involves financial outlay which can be referred to as :
-
Question A project objective can be said to have the following dimensions viz.
:
Question Strategic Position and Action Evaluation Model :-
Correct Answer Is an approach to hammer out an appropriate strategic posture f
or a firm and its individual business
Question The Projects which are undertaken to manufacture certain products whi
ch are being used as raw material by the existing units is known as :-
Question It is mandatory for each unit to obtain necessary clearance from Poll
ution Control Authorities before setting up any project.
Correct Answer True
Question While choosing the location for a project, the following factors shou
ld be considered :-
Correct Answer Proximity to raw materials and markets , Availability of infras
tructure , Government policies and other factors
Correct Answer That it involves current outlay of funds in expectation of futu
re benefits
________.
Question Details regarding Administrative / controlling office comes under the
________ category.
Question In BCG Matrix "STARS" indicate :-
Correct Answer Products which enjoy a high market share as well as a high grow
th rate
Correct Answer Depreciation , Preliminary expenses written off , Increase in s
ecured borrowing
Question The construction of National Golden Quadrilateral can be recognised a

s Project.
Correct Answer True
Question The cost factors of the product mixed is also taken into account to a
rrive at cost at various levels of production and its cost impact of the manufac
turing.
Correct Answer True
Question Capital Issue expenses include :-
Correct Answer Brokerage fees to registrars
Question Having decided on the location and product, the promoter takes into a
ccount the ________ that is to be adopted for producing the product.
Correct Answer Adopted as a guide depending on the consumption pattern of the
society as a whole
Correct Answer Managing Director , Institutional nominees , Committees of the
board
Question Sanctioned bank limits is categorised under :-
Correct Answer Utilisation of installed capacity , Input availability , Sales
trends
Correct Answer Issue of new shares , Long term loans , Short term borrowings
Question The company having ________, is appropriate for the strategic posture
of Conservative under the SPACE approach.
Correct Answer Limited competitive advantage, belonging to a not so attractive
industry but enjoying financial strength and operating in a relatively stable e
nvironment
Correct Answer True
Question A high debt equity ratio may indicate that the financial stake of the
creditors is more than that of the owners.
Correct Answer True
Question The cost of Plant and Machinery includes :-
Correct Answer Cost of stores and spares
Question The basic difference between the feasibility study report and _______
_ is the level of accuracy and degree of detail.
Set 15
Question In the BCG Matrix, the key term of Cash Cows require further commit
ment of funds.
Question In the GE s Stop Light Matrix, when ________ situation prevails , P
roducts call for divestment.
Correct Answer Average Business Strength and Low Industry attractiveness
ture benefits
Question ________ tries to have what the customer will want- where, when, in
what form and at what price.
ards a :-
Question Sewerage and drainage cost of the project is categorised under :-
Correct Answer Building cost
Correct Answer Is a tool for strategic ( product ) planning and resource all
ocation
Correct Answer A list of industries wherein the product is used is made and
quantity and volume is arrived at
elationship
Question After the SPACE chart is constructed, we would normally get any one
of the following basic strategic postures :-

:-
Correct Answer True
Question Appointments made at senior level during the half-year is categoris
ed under :-
Question Delays in infrastructure Development by State Agencies may lead to
:-
Question As per the GE s Stop Light Matrix, Products may justify substantial
commitment of funds where there is :-
Correct Answer Strong Business Strength and high Industry attractiveness , A
verage Business strength and high Industry attractiveness
Question The cost of Plant and Machinery may be adjusted for a possible incr
ease known as :-
Correct Answer Escalation
Question The BCG product Portfolio Matrix, General Electric Stop Light Matri
x and Strategic Position and Action Evaluation Model are considered to be highly
relevant as :-
Correct Answer Portfolio Planning Tools
_______.
Question A high debt equity ratio may indicate that the financial stake of t
he creditors is more than that of the owners.
Correct Answer True
of :-
Question Ratio analysis is a technique of planning and control.
Question Miscellaneous expenditure is written on the asset side of the Balan
ce sheet.
Correct Answer True
Question Cost of fencing comes under the ________ category of the Project re
port.
Question The ratio which covers those assets which can be converted into cas
h immediately is known as :-
hich are being used as raw material by the existing units is known as :-
Question Retained earnings indicates that whatever profits are earned by the
company are not distributed by it by way of ________ but are kept aside for use
in future for expansion or other purpose.
Question Time Series Projection Methods of Demand forecasting consists of :-
Question Unlike financial projections, there cannot be any fixed, well-recog
nised or structure formula/steps for management evaluation/appraisal.
Correct Answer True
Question Production line diagrams show the organisation structure of the pro
ject along with information on location, personnel required for various departme
nts, and their inter-relationship.
Question Details regarding Internal accruals comes under the ________ catego
ry of Project report.
e board
Question Nominal maximum capacity is the capacity that is technically attain
able and this corresponds to the supplier s guaranteed capacity.
Correct Answer True
Question The ratio that roughly measures the company s potential reserve of
cash is termed as :-
run.
Correct Answer True
Set 16
Question The temporary requirement of working capital can be financed out
of :-
Correct Answer True
is known as :-
ay.
Correct Answer Future demand of the product , Proper survey of the prod
uct , Future availability and supply of the product
of future benefits
Correct Answer It does not provide any new information but only rearran
ges the various facts , It does not consider non-fund transactions
Project report.
Question The basic difference between the feasibility study report and __
______ is the level of accuracy and degree of detail.
atement.
Correct Answer Is a tool for strategic ( product ) planning and resourc
e allocation
Question Land and site development comes under the cost aspect of the Pro
ject report.
Correct Answer True
shares
Question The third phase of the technical appraisal which focuses upon ap
praising the likely technical gaps consists of :-
Correct Answer Problems pertaining to the period when the project is in
operation
Organisation and Management Strikes/lay-offs/lockouts etc. Receivables

Material inputs and utilities Stock of raw material Finished goods
Working capital Sanctioned bank limit Stock of raw material
Marketing Pricing policy Pricing policy

Question Time Series Projection Methods of Demand forecasting consists of
:-
Question Financial analysis based on accounting ratios will give mis-lead
ing results if the effects of changes in price level are not taken into account.
Correct Answer True
Correct Answer True
nufacturing.
Correct Answer True
Environmental stability dimension under SPACE Model involves Demand variabili

ty Demand variability
Company s competitive advantage dimension under SPACE Model involves Product
life cycle Product life cycle
Company s financial strength dimension under SPACE Model involves Leverage
liquidity Leverage liquidity
Industry strength dimension under SPACE Model involves Profit potential
Profit potential

nsation
viz.:
Question The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer Stars , Question marks
Question Details regarding Bridge finance comes under the ________ catego
ry of Project report.
odwill written off
Question If the organisation is a trading organisation, the requirement o
f working capital will be on the lower side.
ement
Question Debt Service means payment of installments and interest against
an amount borrowed as per terms of loan.
Correct Answer True
Correct Answer High
Question The profit earned from operations of the project during life of
the project is known as :-
Question The Cash Flow statement is also referred to as :-
Correct Answer Cash flow budget
Question Profit is the result of customer satisfaction, indeed customer d
elight under the :-
Question Having decided on the location and product, the promoter takes i
nto account the ________ that is to be adopted for producing the product.
Question Name and designation of the chief executive comes under the ____
____ category.
as :-
Correct Answer True
Question Stock in the beginning results in :-
Correct Answer Application of funds
Question A business enterprise which has adopted the marketing concept as
an essential ingredient of its corporate policy, is basically :-
Correct Answer Customer market-oriented

Select The Blank


Match The Following
Moving into new areas/product lines Diversification Projects Diversif
ication Projects
Suppliers credit Short term finance Short term finance
Deferred credit Long term finance Long term finance
Setting up new units New Projects New Projects

Your Answer Management problem

shares


tion of the factory
the factory
Select The Blank


as :-

ture
me statement
Select The Blank

of ________.
True/False
mitment of funds.
Your Answer False
Select The Blank

____.
True/False
Your Answer False
True/False
Question Change in the project concept itself may lead to cost and time o
verrun.
Correct Answer True
Your Answer True

Select The Blank


idend
Your Answer Increase in working capital , Preliminary expenses , Dividend
Match The Following

e and commission
Building cost Cost of factory building Cost of factory building
Plant and machinery cost Foundation and erection charges Foundation and e
rection charges
True/False
Question Banks and Financial Institutions, world-wide, are now financing
projects with strategies and terms that would have been hard to believe/imagine
just a few years back.
Correct Answer True
Your Answer True

True/False
Question The secondary data is collected through market survey, specific
for the project being appraised.
Your Answer False

Your Answer Cash inflow
True/False
Correct Answer True
Your Answer True

True/False
Question Cost under-estimation at the project preparation and evaluation
stage leads to cost and time over run.
Correct Answer True
Your Answer True
Select The Blank

Correct Answer High
Your Answer High
Select The Blank


ed as :-

Select The Blank

Project report.
Your Answer General
Select The Blank

________ dimension.
True/False
Correct Answer True
Your Answer True
True/False
Question The construction of National Golden Quadrilateral can be recogni
sed as Project.
Correct Answer True
Your Answer True

Select The Blank

sture of Defensive under the SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial st
rength and belongs to a not so attractive industry, operating in an unstable env
ironment
Your Answer Lacks both competitive advantage as well as financial strength a
nd belongs to a not so attractive industry, operating in an unstable environment

Your Answer Management quality

Your Answer Current ratio , Internal measure , Quick ratio
Select The Blank

Question In the GE s Stop Light Matrix, when ________ situation prevails,
Products call for Hold.
Correct Answer Average Business Strength and Medium Industry Attractive
ness
Your Answer Average Business Strength and Medium Industry Attractiveness

Your Answer Bankers , Financial Institutions
True/False
Correct Answer True
Your Answer True

out of :-
Your Answer Cash Profits , Shares , Debentures


Select The Blank


Match The Following

Moving into new areas/product lines Diversification Projects Diversif
ication Projects
Suppliers credit Short term finance Short term finance
Deferred credit Long term finance Long term finance
Setting up new units New Projects New Projects
Your Answer Management problem

shares


tion of the factory
the factory
Select The Blank


as :-

ture

me statement
Select The Blank

of ________.
True/False
mitment of funds.
Your Answer False
Select The Blank

____.
True/False
Your Answer False
True/False
Question Change in the project concept itself may lead to cost and time o
verrun.
Correct Answer True
Your Answer True

Select The Blank


idend
Your Answer Increase in working capital , Preliminary expenses , Dividend
Match The Following
e and commission
Building cost Cost of factory building Cost of factory building
Plant and machinery cost Foundation and erection charges Foundation and e
rection charges
True/False
Question Banks and Financial Institutions, world-wide, are now financing
projects with strategies and terms that would have been hard to believe/imagine
just a few years back.
Correct Answer True
Your Answer True

True/False
Question The secondary data is collected through market survey, specific
for the project being appraised.
Your Answer False

Your Answer Cash inflow
True/False
Correct Answer True
Your Answer True


True/False
Question Cost under-estimation at the project preparation and evaluation
stage leads to cost and time over run.
Correct Answer True
Your Answer True
Select The Blank

Correct Answer High
Your Answer High
Select The Blank


ed as :-

Select The Blank

Project report.
Your Answer General
Select The Blank

________ dimension.

True/False
Correct Answer True
Your Answer True
True/False
Question The construction of National Golden Quadrilateral can be recogni
sed as Project.
Correct Answer True
Your Answer True

Select The Blank

sture of Defensive under the SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial st
rength and belongs to a not so attractive industry, operating in an unstable env
ironment
Your Answer Lacks both competitive advantage as well as financial strength a
nd belongs to a not so attractive industry, operating in an unstable environment

Your Answer Management quality

Your Answer Current ratio , Internal measure , Quick ratio
Select The Blank

Question In the GE s Stop Light Matrix, when ________ situation prevails,
Products call for Hold.
Correct Answer Average Business Strength and Medium Industry Attractive
ness
Your Answer Average Business Strength and Medium Industry Attractiveness

Your Answer Bankers , Financial Institutions
True/False
Correct Answer True
Your Answer True

out of :-
Your Answer Cash Profits , Shares , Debentures


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PROJECT FINANCE

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The Blank

Multiple Choice Multiple Answer

Select The Blank

Question Longer the duration of production cycle, higher the requirement

Question Management qualities includes :-

Your Answer Aggressive Posture , Competitive Posture , Defensive Posture

Question Casual methods of Demand forecasting consists of

Question The basic document for facilitating Project financing is the :-

Question The Projects which are undertaken to manufacture certain products w

Question The following are the sources of funds :-

Question Short supplies of materials may lead to :-

Question Debt Service means payment of installments and interest against an

Question Demand technique forecasting of Commercial appraisal includes :-

Question Infrastructural projects include :-

Question Infrastructural projects include :-

Question 9 Delay in arrival of domestic/foreign machinery and technicians may

Select The Blank

Question Disposition of funds includes :-

Question The company having ________, is appropriate for the strategic po

Question A market survey generally is a ________ survey.

Question The advantage of secondary sources of data is that it is readily

Question In the Detailed Project Report, Management aspects includes :-

Question Depreciation is sometimes treated as ________ funds.

Question ________ occupies a unique position in the macro economic developmen

Question The temporary requirement of working capital can be financed out of

Question The construction of National Golden Quadrilateral can be recognised a

Question ________ in liabilities involves inflow of funds.

Organisation and Management Strikes/lay-offs/lockouts etc. Receivables

Question In the Detailed Project Report, Marketing aspects includes :-

Environmental stability dimension under SPACE Model involves Demand variabili

Question The various aspects which need to be considered while assessing

Multiple Choice Multiple Answer

Select The Blank

Multiple Choice Single Answer

Multiple Choice Single Answer

Multiple Choice Multiple Answer

Multiple Choice Single Answer

Multiple Choice Multiple Answer

Select The Blank

Multiple Choice Single Answer

Multiple Choice Multiple Answer

Select The Blank

Select The Blank

Multiple Choice Single Answer

Select The Blank

Multiple Choice Multiple Answer

Match The Following

Multiple Choice Single Answer

Multiple Choice Single Answer

Multiple Choice Single Answer

Select The Blank

Select The Blank

Multiple Choice Single Answer

Multiple Choice Multiple Answer

Select The Blank

Select The Blank

Multiple Choice Multiple Answer

Select The Blank

Multiple Choice Single Answer

Multiple Choice Multiple Answer

Select The Blank

Multiple Choice Multiple Answer